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How does assisted reproductive technology (ART) impact estate planning?

by Legacy Plan
October 1, 2024

Assisted reproductive technology (ART) has revolutionized family planning, but it also creates unique challenges for estate planning. As more people use methods like in vitro fertilization (IVF), egg freezing and surrogacy to have children, estate planning has had to adapt to ensure families are protected. This article explores the key estate planning considerations for those using or considering fertility treatments.

Assisted reproductive technology refers to fertility treatments where eggs or embryos are handled outside the body. The most common form is in vitro fertilization (IVF), but it also includes egg/sperm donation, surrogacy and embryo preservation. As ART has become more prevalent, it's important to understand how it impacts inheritance rights, beneficiary designations and other estate planning issues.

According to the federal Centers for Disease Control and Prevention (CDC), more than 2% of all infants born in the United States are now conceived using ART. This number has more than doubled over the past decade.

How dose assisted reproductive technology (ART) impact inheritance rights?

A pregnant woman in yellow and green clothes sits on a couch, holding her belly. Next to her, a person in similar colored clothes is writing on a clipboard, perhaps discussing inheritance rights. Another person, partially visible, holds a coffee cup. The setting appears relaxed and informal.

One of the most significant estate planning challenges with ART is determining inheritance rights for children conceived after a parent's death. Most states have laws addressing posthumously conceived children, but they vary widely.

Some states, like California, allow posthumously conceived children to inherit if certain conditions are met (for example, the deceased parent consented in writing to posthumous conception).

Other states, like New York, have time limits on when posthumous conception must occur for the child to inherit (typically two to three years after death). Some states still don't address posthumous conception at all in their inheritance laws. For families using ART, it's critical to explicitly address posthumous conception in estate planning.

What are the key estate planning considerations with frozen embryos?

Many couples undergoing IVF end up with unused frozen embryos. This raises several important estate planning questions:

  • Who inherits the embryos if both partners die?
  • Can embryos be bequeathed to someone else in a will?
  • What should happen to embryos after a certain time period?

There's no uniform law governing the inheritance of frozen embryos. Some states consider them property, while others view them as potential life. Estate planning documents should clearly state the client's wishes regarding any stored embryos.

Additionally, many fertility clinics require couples to sign disposition agreements stating what should happen to unused embryos. These agreements should be reviewed and potentially updated as part of the estate planning process.

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How does assisted reproductive technology (ART) affect beneficiary designations?

Beneficiary designations on assets like life insurance policies and retirement accounts typically pass outside of a will or trust. With ART, it's important to review and update these designations to ensure they align with the family’s wishes. For example, a designation that leaves assets to "all my children" may not include children conceived posthumously through ART unless explicitly stated. Beneficiary designations should be carefully worded to avoid unintended exclusions.

Estate planning for same-sex couples using assisted reproductive technology (ART)

A family of four sits together in a cozy living room. An adult in overalls holds a child on their lap while another child sits on the floor, holding onto the leg of the second adult who is seated on the couch smiling. A coffee mug and laptop, likely used for estate planning, are on a table nearby.

Same-sex and LGBTQ couples often rely on assisted reproductive technology to have children, which can create additional estate planning complexities. In some states, the non-biological parent may need to legally adopt the child to ensure full parental rights. If using a known sperm/egg donor, it's important to have clear agreements in place regarding the donor's rights and responsibilities. For couples using a surrogate, legal parentage may need to be established through court order in some jurisdictions.

Estate planning documents should be carefully drafted to ensure both partners are recognized as legal parents and have equal inheritance rights.

How can trusts be used in assisted reproductive technology (ART) estate planning?

Trusts can be a valuable tool in estate planning for families using ART. Some potential uses include:

  • Creating a trust to hold frozen embryos and provide instructions for their use/disposition.
  • Establishing a trust for future children conceived through ART, including those potentially conceived posthumously.
  • Using a trust to provide for a surrogate during pregnancy and immediately after birth.

When drafting trusts for ART situations, it's important to use flexible language that can accommodate various potential outcomes.

What are the tax implications of assisted reproductive technology (ART) in estate planning?

The use of ART can have significant tax implications in estate planning. Costs associated with ART treatments may be tax-deductible as medical expenses. Gifts to a surrogate may be subject to gift tax if they exceed annual exclusion limits. For posthumously conceived children, there may be estate tax consequences depending on when conception occurs relative to the deceased parent's death.

How does assisted reproductive technology (ART) impact guardianship designations?

A woman lovingly embraces a young child with blonde hair in a ponytail. The child, wearing a pink top, smiles and rests their head on the woman's shoulder. The background is softly blurred, highlighting their close and tender moment—a bond that transcends even considerations of inheritance rights or estate planning.

Guardianship designations are a crucial part of estate planning for parents. With ART, there are some unique considerations. For posthumously conceived children, it may be necessary to name contingent guardians who would serve if a child is born after the parents' deaths.

In surrogacy situations, it's important to have guardianship designations in place before the child is born in case something happens to the intended parents during pregnancy. For same-sex couples, ensuring both partners have equal legal rights to designate guardians may require additional legal steps in some jurisdictions. Clear, comprehensive guardianship designations are essential to protect children conceived through ART.

What role do disposition agreements play in estate planning?

Disposition agreements, which outline what should happen to unused genetic material or embryos, are a critical component of ART estate planning. These agreements typically cover scenarios like death of one or both partners, divorce or separation or abandonment of the ART process. While fertility clinics often provide standard disposition agreements, these should be reviewed as part of the estate planning process to ensure they align with the client's overall estate plan.

How can estate plans address future assisted reproductive technology (ART) use?

For clients who may use ART in the future, it's important to draft estate planning documents with enough flexibility to accommodate various scenarios. This might include using language like "all my children, whether now living or hereafter born" in wills and trusts; including provisions for potential future embryos or genetic material; addressing the possibility of posthumous conception; and regular review and updating of estate planning documents is particularly important for clients considering or actively using ART.

Conclusion

As assisted reproductive technology continues to advance and become more prevalent, estate planning must evolve to meet the unique needs of these families. From addressing posthumous conception to navigating complex tax implications, ART creates a host of new considerations when developing and revising estate plans.

By staying informed about the latest developments in both ART and estate law, families can help ensure that their loved ones are protected, regardless of how they're formed. Regular review and updating of estate plans is crucial, particularly for those using or considering ART.

Ultimately, while ART adds complexity to estate planning, it also offers opportunities for planners to provide valuable, specialized services to a growing segment of the population. With careful consideration and expert guidance, families formed through ART can achieve the same level of legal and financial protection as any other.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

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Email - info@legacyassuranceplan.com
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