EXCLUDED HEIRS MAY STILL INHERIT

Posted by on May 3, 2013 in Articles, Estate Planning, Family Law

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“THE LEGAL CORNER”

By Sam A. Moak

 EXCLUDED HEIRS MAY STILL INHERIT

The information in this column is not intended as legal advice but to provide a general understanding of the law.  Any readers with a legal problem, including those whose questions are addressed here, should consult an attorney for advice on their particular circumstances.

When Elizabeth was born out of wedlock in the 1950s, she was adopted soon afterwards by another family.  As a young adult, she located her birth mother and formed a long-lasting relationship with her. Elizabeth also discovered that, through her mother, she was related to the beneficiaries of a large fortune.  Two multimillion dollar trusts had been established to provide income to Elizabeth’s mother during her lifetime. The remaining principal was to go to her “descendants,” according to one trust, and to “each then living child of hers,” according to the other trust.

Following a long battle, a court has found that Elizabeth is entitled to share in the fortune, notwithstanding the argument by her mother’s other heirs that she was not her mother’s “child” or “descendant” because she had been adopted out of the family.  Looking at the applicable state law when the trusts were created, the court determined that, at such times, nonmarital children could be included as descendants or children of their biological parents for purposes of inheritance. There also was an overarching constitutional issue, as some courts have held that treating children born out of a marriage differently from marital children is a denial of equal protection of the law.

In Elizabeth’s case, the issue would have been more clear-cut in her favor had the trust instruments simply included her as a beneficiary, either by more inclusive language or by using her name. Of course, up to a point, the creator of a trust or Will has leeway in deciding which of his or her children to include as beneficiaries. But the law has been known to step in on behalf of children to achieve a measure of justice and fairness.

A case in point, concerned the estate of Anna Nicole Smith.  In her Will, Smith left all of her estate, which could have been greatly enhanced by many millions of dollars from her late husband’s assets, to her son, but that is another story.  Only months before both Smith and her son died, she gave birth to a daughter. Whether the omission of any future children from Smith’s Will was intentional or merely a drafting error, it is probable that Smith’s daughter will inherit the estate.

Under the “omitted child” doctrine followed by a majority of courts, when a parent has a Will and then has children, those children are treated as if they were born prior to the Will, and they are afforded the same treatment as any other siblings. Of course, there is always the case of the child or grandchild who did not live up to expectations.  You may think just not mentioning them in your Will is sufficient to leave them nothing.  However, simply leaving them out is not enough.  You should specifically identify them and state they are not to benefit from your estate.

Your estate planning documents should be reviewed with an attorney on a regular basis and kept current with your life changes.  Birth, death, marriage, moving, and divorce are but a few life changes that can significantly affect your estate planning. Don’t wait until it’s too late to revise your plans to reflect your wishes and circumstances.

Sam A. Moak is an attorney with the Huntsville law firm of Moak & Moak, P.C.  He is licensed to practice in all fields of law by the Supreme Court of Texas, is a Member of the State Bar College, and is a member of the Real Estate, Probate and Trust Law Section of the State Bar of Texas.

www.moakandmoak.com

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