It's The Law: Adult adoption may be an estate planning tool

Adult adoption may be an estate planning tool

Question: In your article a few months ago, you wrote about a case where the court voided a man’s adoption of his adult girlfriend. Does that mean all adult adoptions are problematic?

Answer: The article discussed the case of Goodman v. Goodman. In that case, Mr. Goodman and his wife established an irrevocable trust for the benefit of Goodman’s children. They divorced and Goodman later adopted his girlfriend. The only apparent reason for adopting the girlfriend was to make her a beneficiary of the irrevocable trust, reducing the share of his biological children.

The Goodman Court threw out the adoption. All parties agreed that Florida law did not prohibit adoption of adults but, Florida law requires notice of an adoption proceeding be given to any person who has a direct financial and immediate interest which will be gained or lost by the adoption. Mr. Goodman did not provide notice to his ex-wife or children and the Court ruled failure to provide that notice voided the adoption.

The Goodman decision does not invalidate adult adoptions in Florida. In fact, it confirmed Florida does not prohibit adult adoptions. But Goodman emphasizes that due process and Florida law mandates notice of an adult adoption application be given to all those who have an immediate financial interest that will be impacted by the adoption.

About three months after the Goodman case, another appellate court issued a decision in the adult adoption case of Dennis v. Klein. But, unlike in Goodman, the adoption in Klein was intended for estate planning purposes and not an effort by a former spouse to circumvent an agreed trust created with his ex-wife.

In Klein, a man with net worth of over $15 million had 5 children. One of his sons could not have children, but adopted an infant. In response to that adoption, the father amended his trust document to make it clear that the term “issue” included adoptees. The trust did not specifically address adult adoptees.

Thirteen years after the father’s death, one of his daughters adopted a 27-year old woman in Pennsylvania. Unlike Florida, Pennsylvania law did not require notice to financially interested parties. At the adoption hearing, the child explained she was the adoptee’s godmother, had been close with the adoptee’s parents for years, had taken care of the adoptee as a baby, had paid for her college education and otherwise had a close relationship with her. Identifying the reason for the adoption, the child explained that under her father’s trust, her interest could pass to an adopted child and she wanted the assets to go to somebody that deserved them. The child was also unable to have children due to her battle with Hodgkin’s disease. Absent the adoption, the child’s share would have been dispersed “sideways” to her living siblings or “their issue.”

The court went out of its way to recite the long and close relationship between the child and her adopted daughter. It went on to note that Florida’s Public Policy expressly permits adoption of adults and that after a valid adoption, Florida makes no distinction as to the extent to which an adult adoptee may become a beneficiary in probate proceedings.

The court also noted there were some situations in which Florida’s Public Policy would void an adult adoption. It referenced Goodman and also the Rickard v. McKesson case, in which an 88-year old childless man adopted his 72-year old homosexual partner to make the latter beneficiary of a trust, depriving another of her beneficiary rights in the process.

The adoption was ruled a fraud on the court and was nothing more than a sham. The court ruled that the controlling fact issue would be the father’s intent in creating the trust. The terms of the trust placed no limitations on a legally adopted person becoming a beneficiary under the definition of “issue.” But, the lawyer who drafted the trust admitted he did not discuss adult adoption with the father. Absent any provision to the contrary, where a trust is created and executed in Florida, the court explained that it is presumed the person creating the trust expected Florida law to apply and Florida law permits adult adoption. The court seemed to conclude the adoption should stand for estate planning purposes. But, the appellate court sent the case back for trial and a full evidentiary hearing on the issue of the father’s intent.

These cases together confirm that adult adoption can be part of one’s estate plan. But, if the adoption will immediately affect the financial interest of another, that person must be given notice if the adoption is in Florida. And, the adoption may still be subject to challenge if it impairs the intent of the person creating the trust. This is an evolving area making good legal advice of the utmost importance.

William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.

Questions for this column can be sent to: William G. Morris, e-mail: wgmorrislaw@embarqmail.com or by fax, (239) 642-0722.

Other articles of interest can be viewed at Morris’ website, www.wgmorrislaw.com and at marconews.com.

© 2013 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Discuss
  • Print

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.

Features