With guest co-blogger Melissa Fernley.
Last month, prominent businessman and Florida socialite John Goodman filed a petition to adopt…his girlfriend. This unconventional move, coupled with Goodman’s notoriety as the multimillionaire founder of the International Polo Club Palm Beach, prompted news outlets around the world to pick up the story. The public responded with more than a few raised eyebrows, and many questions. Is this even possible? Is their relationship now incestuous? Why would someone do such a thing?
Yes, adult adoption is possible, and is allowed in many states across the country, including Missouri, although a few states require some sort of previous familial relationship. The result of such adoptions is not a traditional parent-child relationship, but rather a legal relationship that creates the same rights and responsibilities as would the adoption of a child. Adopted adults also become heirs of the adopting parent, although some states restrict the extent to which they can inherit.
Commentators are speculating that Goodman’s decision to adopt his girlfriend, Heather Hutchins, may have been prompted by pending civil litigation. Earlier in March, Goodman was found guilty of DUI manslaughter after he hit and killed Florida resident Scott Wilson while driving under the influence of alcohol. Wilson’s family has brought a civil suit against Goodman, seeking damages that could exceed $100 million. The case has since been dismissed, suggesting a settlement was reached between the parties.
According to news reports, upon adoption, Hutchins could become a beneficiary of a trust Goodman had previously created for his two minor children, and she will be entitled to receive distributions of income and principal from the trust which could range between $250,000 and $5 million annually. If the trust is irrevocable, and Goodman is not a beneficiary, the trust is most likely inaccessible to Goodman’s creditors, including Wilson’s family. The money, in effect, belongs to Goodman’s children, which, after the adoption, may include Hutchins as well (depending on the terms of the trust, if it includes after-adopted children, including adult adoptees).
Goodman’s lawyers assert that the adoption was meant to give Goodman more direct oversight of the management of the trust, including preservation of closely-held family assets, through her rights as a trust beneficiary, as Goodman is unhappy with the actions of the current trust management company. Practically, however, Hutchins may potentially use her newly-acquired trust funds to keep Goodman in the lifestyle to which he is accustomed in the event he has to pay over a significant portion of his remaining personal assets to Wilson’s family.
For the rest of us, there are other, more common, reasons for adult adoptions.
Adoption of Adult Step-Children
Many individuals, in the interest of family bonding, choose to adopt their spouse’s children from a previous marriage. Such adopters often feel that this creates a greater feeling of family connectedness and harmony. Often, the new spouse’s children are no longer minors, therefore an adult adoption must take place. Most states have recognized this as a legitimate reason for adult adoption, since an obvious familial tie and relationship exist despite the adopted person’s age.
Adoption as an Alternative to Same-Sex Marriage
In states where same-sex marriage is still prohibited, some same-sex couples have attempted to legally legitimize their relationship by having one partner adopt the other. This gives them rights approaching those of a married couple, such as insurance benefits, family housing options, and inheritance rights.
Some state statutes prohibit members of a same-sex couple from adopting each other, or their courts have decided not to recognize such adoptions. Still, many states do recognize legitimizing a same-sex relationship as a valid reason to adopt. However, adoption of a same-sex partner is falling out of favor, as many same-sex couples are now focusing their efforts on attempts at achieving marriage equality.
Adoption for Purposes of Inheriting Under a Will or Trust
The general rule is that an adopted adult should be treated the same as an adopted minor for purposes of inheriting under a Will or trust. However, courts will scrutinize any pre-existing estate planning documents to determine whether inclusion of the adult adoptee as a beneficiary under the documents would be appropriate or within the intent of the adult adoption statute.
Some states, including Missouri, will look at several circumstances before they allow an adult adoptee to become a beneficiary of a trust. Missouri courts will look at whether the adopting parent has assumed responsibility for the adopted adult, whether the adopted adult has taken his or her adopting parent’s last name, whether the adopted adult entered the adopting parent’s home and how long they lived together, and the nature and extent of any parent-child relationship. Many courts feel, however, that the legislature would have included specific language had they intended adopted adults to receive lesser inheritance rights than adopted minors.
Adult adoption should not be used as an estate plan unto itself. With its highly variable interpretation by the courts, there is no guarantee that an adopted adult will receive any inheritance at all. However, in certain cases it may be a convenient way to attain the legal relationship necessary for a specific estate plan.
So, what is the answer to whether adult adoption is a valid estate planning technique? It depends. A qualified estate planning professional is the only person who will be able to evaluate your specific situation and make recommendations.