One of the more unique estate planning issues arising in recent years relates to “posthumous births.” This refers to a child who is born after one of their parents has already died.
This was always a possibility, as a parent could pass away in the months after a child was conceived by before the actual birth.
Yet, the issue has grown more acute with reproductive technology advances, including tools that allow the extraction and storage of genetic material, combined with in vitro fertilization. Children are now able to be conceived years after one of their parents has died. While the option is available to anyone, families in certain situations are currently more likely to take advantage of the technology, including those deployed in the military and when a partner has a serious medical ailment, like cancer.
Estate Planning Complications
As with all unique family situations it is critical to craft a tailored estate plan that takes these issues into account. Few laws exist which clearly explain how to handle these posthumous births for estate purposes. That makes it even more important to fill the gap and plan on your own to avoid a web of problems if left to unclear rules.
A recent Financial Advisor Magazine story touched on a few of these issues. Perhaps most obviously, there are concerns about inheritances. In most cases, after a passing an inheritance is doled out immediately. But does the child conceived later have any rights to that inheritance? If so, how long must one wait before those rights are extinguished? Should other beneficiaries receive their portion immediately?
There are no automatic answers to these questions, as they require a balancing of interests. It is therefore imperative for families who might be in this situation to have their clear wishes laid out in an estate plan ahead of time.
In New York, lawmakers are considering options to provide more concrete answers for residents who fail to plan ahead. As the FA story explains, “Legislation wending its way through the New York State legislature, for example, proposes that for a child born after the death of a genetic parent to be considered the offspring of that parent for inheritance purposes, it must be in utero within 24 months or born within 33 months.”
On top of the proposed state law requires consent from the individual who is not alive at the birth. Without that consent, the child would have no inheritance rights, regardless of the time frame.