After-born Children and New Additions
The purpose of this article is to address the significance of incorporating after-born children and other new additions to your family into your estate plan. If you have recently welcomed new children, grandchildren, or other family members, your estate plan may need to be updated to reflect these additions.
This year I once again found myself holding a newborn in my arms. We welcomed my newborn son into our family in June and although I tried my best to put a pause on work while out on paternity leave, as I stared into the eyes of this chubby little guy, I couldn’t help but find myself thinking: “I should update my Will.”
Although I did eventually find willpower to pull myself away from thoughts about work, I knew that I was not alone in those thoughts. For many families, one of the triggers that prompts them to update their estate planning documents are new additions to the family. Whether your current will was created twenty years ago before your second child was born, or if your otherwise up-to-date plan now needs to include that new grandchild, there’s no better time to update your documents when we have these new additions.
But the real question is - do even you need to update anything?
The answer, as in many things, is “it depends.” In many jurisdictions, and under Maine Probate Code § 2-302 if the person who creates a will omits - whether intentionally or unintentionally children who are born after the execution of the will, that child still receives a share of the estate. The exact amount is going to change from one will to another and will largely depend on how much they are entitled to under intestate succession laws as well as how much the other children, if any, were provided for. However, if you intentionally and specifically disinherit a child in your will, or otherwise provide for that child outside of the will, then these provisions may not apply.
So if you created a will thirty years ago, and had your second child just two months later, your including them as “subsequent child” is legally sufficient if that’s how you intended to provide for them. Does that mean you do not need to update your will? I’d ask “subsequent child” how they feel first!
But what does this law mean when we have more complex situations, such as blended families and step-children? Our probate code only classifies “children” as those established through legal parentage. Parentage may be established under Title 19-A M.R.S. § 1851 through, 1. Birth 2. Adoption 3. Voluntary (legal) Acknowledgment. 4. Presumption 5. De Facto Parentage 6. Genetic Parentage 7. Assisted reproduction or 8. Gestational carrier agreements. Without getting into too much detail here - step-children are not children. So if your intent is to provide for your spouse’s children, and for your spouse to provide for your children it becomes substantially more important to update your documents in this case. This question becomes more complex the further we look into it as you will also want to make sure your will actually controls in the way you intend. For more on that subject, take a look at our conversation around assets in probate.
When you have minor beneficiaries you may also need to consider factors outside of whether they’ll receive assets. Often times when we have minor children involved, a more important question becomes not, will they receive assets? But rather, who will be responsible for those assets? Failure to incorporate a new minor beneficiary into your planning could result in that minor being directly responsible for those assets. This could mean naming a guardian in your will, or updating your list of successor trustees to manage those funds for that minor, until they have reached a suitable age of majority.
An often over-looked piece of estate planning comes when we have new grandchildren born into the family. Many times, clients will plan to leave assets to their children, and if not their children, to their child’s children. In circumstances like this it is very important to have the appropriate person named to manage those funds until a selected age of majority. You do not need to use the default assumption of 18 or 21, as permitted by the Uniform Transfer to Minors Act. Often times access to inheritance can be limited or even fully restricted until a grandchild reaches ages like 23, 25, or older. In the interim, someone else needs to be appointed to manage that inheritance and insure it is not being squandered and that the beneficiary can still utilize it when necessary. So when a new grandchild is born, although you may not legally need to update your documents, you may find that you would rather see that grandchild’s uncle or aunt manage funds, rather than their other parent.
When assets are held in a trust things may not be as simple. Depending on the type of trust, it may not be possible to update your beneficiaries. Typically, an Irrevocable trust cannot be amended to include new beneficiaries, regardless of their relationship to the Grantor. Even a Revocable trust may include language that specifically disinherits future-born children. There may also be language in a distribution to a beneficiary that provides for that beneficiary, but not for their children. Some distributions lapse upon the passing of the beneficiary, thereby cutting out any of their descendants, whereas other distributions will provide for multiple generations to come, if the assets allow for it. Such distribution patterns may also be found in a will, so pay attention to how your assets are flowing out of your estate.
When it comes to grandchildren, the question is not always as straightforward. Although often times a grandchild may end up taking thanks to our intestate succession rules, that’s not always the case.
These questions can be complicated and knowing exactly what your estate plan says in paramount in knowing how distributions will be handled. Often times, this is a question best answered by your attorney. If you do not have an attorney or if you are interested in a consultation with an attorney from Rune Law, you can find our booking page here.
