Who Takes the Eggs? ART and Estate Planning Considerations
As technology’s digits crawl through the nooks and crannies of our physical world and cyberspace, the legal consequences and questions emerging keep even us non-IP lawyers quite busy. Considering assisted reproductive technology (\”ART\”), family law was the premier practice area for getting caught in ART\’s web. Few lawyers realized the effects ART would have on estate planning and, even as the effects became clear, only a fraction of states passed laws providing legal guidance. Fortunately, Illinois is a state that considered ART in its laws and included laws for in vitro fertilization in the Parentage Act. Additionally, the Probate Act states that children born after a parent’s death (“posthumous” children) are to be considered having been born during the parent’s lifetime. So, what does all this technolegalese mean? Well, in terms of inheritance and/or estate planning laws, it means conversations should be had between Illinois spouses if conception is a challenge or an impossibility for one or both spouses.* The conversations are necessary because of 2 vital estate planning tools often used by couples, Health Care Powers of Attorney (“HCPOA”) and Property Powers of Attorney (“PPOA”), which can also provide instruction for ART cases. Yes, lawyers love acronyms. In Illinois, a posthumous child born via ART typically emerges in 1 of 3 ways: Use of frozen sperm; Use of a frozen embryo; or Use of a frozen egg. Furthermore, obtaining frozen sperm or eggs may not only occur after incapacity but also may occur after death, which is when estate planning mechanisms are triggered. When creating an estate plan, couples usually consider a bunch of “what ifs,” e.g., “what if I become disabled while we’re still in the “prime” of our lives and haven’t had kids yet?” A HCPOA is a tool that requires making those decisions but, consequently, eases the fears associated with the “what ifs.” Accordingly, when considering ART, a HCPOA could, for example, authorize the implantation of frozen sperm or eggs. Of course, other considerations would naturally follow, such as, how one abled-parent and one disabled parent would raise a child. Still, ART combined with the law creates a reasonable and protected possibility for having a family, when that likelihood, outside of adoption, didn’t exist before. Another equally interesting issue relates to the PPOA. But, you say, “That’s about property.” Yes, it is. In a 1993 California decision, Hecht v. Superior Court, which is used by several states, the Court determined that frozen genetic reproductive material, such as sperm and eggs, is property for the purpose of leaving a gift in a will (aka “devise”). Here, you might think the conversation would be easy – women can leave their eggs to their partners; but, not so fast. What if the eggs are frozen, then the relationship is legally dissolved, the donor spouse remarries, and then passes away? Who gets the eggs if the second spouse doesn’t want any (more) kids? She could disclaim them and pass them to her descendants or siblings; that would be interesting. The future brothers and sisters of the former partner? Should the reproductive material be destroyed? Who do you think should get the eggs? * The term “spouses” and \”partners\” are interchanged in this context because the terms are synonymous in Illinois law.
The 3 Tenancies and Your Planning: It’s Not about Rent
In the legal field, we use and create terms and phrases that sound familiar to non-legal professionals, but are strangers when a legal professional provides the actual definition. Take, for example the term, “tenancy.” It sounds like it’s related to renting property, and it is – sort of, sometimes as when you’re discussing leases. However, when discussing legacy planning, it’s a much larger animal. In legacy planning, lawyers primarily discuss 3 tenancies, most of which involve real property or bank account ownership, not renting. Tenancy in common is the most basic type of tenancy ownership. A tenants in common relationship between 2 people over a house, for example, means that one party controls interest in one half of the house, and the other party controls interest over the other half. Either party can sell, lease, mortgage, or devise their interest in half of the property. However, if the other party passes away, generally the surviving party does not get the other half of the property; the survivor is left with his or her interest alone. The remaining half is either bequeathed or passed to the decedent’s heirs via state law.People are rarely tenants in common with respect to bank accounts; this type of arrangement is usually crafted for prenuptial agreements or settlement agreements and, then, the focus is often the parties’ contribution to the account. Joint tenancy with rights of survivorship, on the other hand, allows the surviving party in the above example with the house to own the whole house. Joint accounts are also very common with respect to bank accounts, checking or saving. So, if Grandpa has a bank account and you are on the account as a joint holder, when Grandpa passes away, all of the funds in that account become yours, under most circumstances.However, joint tenancy is the animal that can become a beast for parents trying to leave property for children. Placing a house in joint tenancy with right of survivorship to a child could trigger a taxable event for the child. Additionally, suppose you have 2 children, the house, and life insurance. The house is worth $200,000 and the life insurance benefit is $200,000. You might think that leaving the house to one child and designating the other as beneficiary on the life insurance policy would be an even split. Yet, the child with the house may have to pay estate or gift taxes on the home, leaving the gifts to your children unequal. Tenancy by the entirety is joint tenancy for married couples. This may seem straightforward because most people know that transfers between husband and wife are not taxable events. But, what if the transfer was from husband to husband or wife to wife? Because the IRS doesn’t recognize husband to husband or wife to wife transfers, the survivor of the couple may be facing a taxable event like the child with the house. So when thinking about gifts or transfers of property, careful planning is needed to avoid these non-rental sticky wickets.
What the Illinois Civil Union Act Means . . . to Many
I apologize because today’s blog was supposed to be about why caution in choosing a trustee is important. However, recently I’ve received a number of questions regarding the affects of the Illinois Civil Union Act. Now that the fact that people are free to join who they want in the legal status of a loving union has sunk in some, questions and issues are surfacing. Individuals, not just from the LGBT community, but from other corners of humanity are interested and want to know more. Additionally, a business boom has started, which I think is a good thing, but I’m going to address a few questions first. Q: My boyfriend and I live together [heterosexual couple] and are considering a civil union now and getting married later, how are civil unions dissolved? A: Civil unions are dissolved just like a divorce, so it’s probably not worth it for heterosexual couples to enter into a civil union and then get divorced in order to get married. Q: What are the practical implications for LGBT couples? A: LGBT couples in Illinois, and states that recognize civil unions as legally equivalent to marriages, have all the benefits and obligations of married couples in state. Because the federal government does not recognize civil unions, (see Defense of Marriage Act, a.k.a., DOMA, which archaically defines marriage as a union between a man and a woman) a multitude of benefits – about 1,138 if an LGBT couple resides in Illinois – are provided through the federal government and, as a result, are not available to partners in a civil union. Likewise, if an LGBT couple travels to a state that doesn’t recognize the union, benefits that are available in Illinois, such as a spousal share through our intestacy code or rights to visit a partner in intensive care, would not be available in that state. Q: What couples benefit the most from the Civil Union Act? A: Elderly couples on Medicare who had to live independently from each other because living as a couple would jeopardize their benefits, can now be together as a civil union and maintain their benefits for the very reason partners of most civil unions can’t enjoy federal benefits – their union isn’t recognized by the federal government. Q: What about domestic partnerships in Illinois? A: The Illinois domestic partnership registry is no longer open and domestic partners are encouraged to obtain a Civil Union certificate. Now, a bunch of businesses are booming (well … seeing a significant increase of revenues; I couldn\’t resist the alliteration): The Civil Union Act has brought divorce lawyers an entire new market. But let’s hope that particular fruit of this tree for my colleagues won’t ripen for a while. Civil Union ceremonies require flowers, catering, music, officiants – all the things that weddings would – at least for those partners who want that type of celebration. (For some reason the baby shower of an episode of the Real Housewives of Atlanta springs to mind.) So the hospitality industry is very happy with the new law. P.S. I can recommend a great officiant if you need one – she may even toss in a Celtic hymn if she really likes you! Computer programmers and organizational gurus are enjoying themselves as well because systems and forms have to be replaced or upgraded. So, the Illinois Civil Union Act has ultimately placed a lot of smiles on citizen’s faces. Now, if Congress would just repeal DOMA. Thanks for allowing the digression. Part 2 of \”Why There\’s a Trust in \”Trustee\” will be available next week.
Lucky Stars Unlucky Heirs: Even the Unfamous Should Have a Valid Will
Approximately 70% of Americans who should leave some sort of testamentary document or trust behind when they die don’t. Why? Because we don’t like thinking about the day when we’re no longer going to be around, let alone talking about it, and heaven forbid planning for it. So we procrastinate until we end up dead with loved ones on the cusp of committing murder or worse – battling each other in probate court until attorneys’ fees have engulfed most of the estate. I offer a few suggestions: Don’t be like Sonny Bono who died without a will and left his widow to battle with a man claiming to be Chaz’s illegitimate half-brother. If you’re married or in a civil union, try not to repeat Barry White’s mistake. “The Maestro” died not only intestate, i.e., without a will, but also without having divorced his first wife with whom he’d been estranged for decades. So if you’re going to put off the inevitable, don’t put off making your divorce or break-up legally valid. The Barry White Wars: (1) between long-time lover and mother of last child and estranged wife of about 20 years and mother of four, and (2) between his 9 children. Not that I think that many would share in the aspirations of Anna Nicole Smith, those who are reading this should consider when drafting your current estate plan that you may have another child after the plan is effectuated. So try not to accidentally disinherit the second child by leaving everything to your “only child, INSERT NAME HERE.” Finally, if you can satisfy suggestions 1 – 3 successfully, remember not to “be like Mike,” Michael Jackson, that is. If you have a trust, actually put something in it. Most know how literally indebted to the world Michael Jackson was, but if he had placed a few actual, fully-paid-for possessions in trust, the creditors would have probably been unlikely to gain access to those assets. A trust with nothing in it is invalid. Although I don’t suggest creating a bequest like the late Torontonian, Charles Millar, leaving everything to the Toronto woman who gave birth the most times in the 10 years following his death, I do suggest having something valid in place to protect your family, if not from others, then from themselves.