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The Modern Family

With the rise of blended families, same-sex marriage, artificial reproductive technology and cohabiting couples, the modern family poses unique needs not met with conventional trusts.

Introduction

Thirty years ago, a traditional family was considered by many to be a husband and wife who married at an early age, bought a home, had children and worked toward financial security.

Today, with the rise of blended families, same-sex marriage, artificial reproductive technology, cohabiting couples and other household dynamics, that “traditional family” represents only one-third of American households.1

The other two-thirds of families – as well as certain members of traditional families – have unique needs that present challenges under conventional trust provisions. From carefully considering the definition of children and grandchildren, to ensuring beneficiaries receive their inheritances regardless of gender identity, trusts need to reflect new types of family diversity. The following provisions are intended to address this diversity.

Section 01

Definition of Child And Descendant – Including Artificial Reproduction

In determining whether any person is a child or descendant for purposes of this trust agreement, the following shall apply:

  1. A “child” of a person includes, as of the time such determination is to be made:
    1. A child born to such person or to such person’s spouse while they are lawfully married, including any child conceived by natural means with such person’s genetic material or by using artificial reproductive technology with or without such person’s genetic material;
    2. A child lawfully adopted through court proceedings by such person prior to the child attaining the age of 21 years;
    3. If the person is biologically female, a child (i) born to such person, regardless of whether such child was conceived with the person’s genetic material, unless such birth was pursuant to a gestational or surrogacy agreement, or (ii) born to another individual but conceived with such person’s genetic material, unless such person acted solely as the donor of such genetic material without the intent to become a custodial parent of such resulting child; or
    4. If the person is biologically male, a child who was conceived with the person’s genetic material and who the person acknowledges as such person’s child by delivering his signed, written acknowledgment to the Trustee during the person’s lifetime or by marrying such child’s genetic mother after the child is born; provided, however, that such individual shall not be deemed to be the child of such person for purposes of this Trust until the date on which the Trustee receives such acknowledgment or such marriage takes place; provided, however, that in all cases an individual shall cease to be the “child” of a person when the parental rights of such person with respect to such child are terminated during such person’s lifetime through adoption court proceedings.
  2. The “genetic material” of a female person refers to the ovum of such person, and the “genetic material” of a male person refers to such person’s sperm.
  3. A child of a person is a “descendant” of that person and of all ancestors of that person. A person’s descendants include all children of such person and such children’s descendants whenever born. Except when distribution or allocation is directed to descendants per stirpes, the word “descendants” includes descendants of every degree whether or not a parent or more remote ancestor of a descendant is also living.
  4. Notwithstanding the foregoing, a person’s posthumously born child as defined above shall be deemed a “child” of such person as of such person’s death only if the child is born alive no more than ten (10) months after such person’s death and if such child lives for at least ninety (90) days.

Note: State laws differ on stored genetic material and children conceived after a parent’s death using his or her stored genetic material. The above definition of “child” and “descendant” is not intended to address this topic.

Section 02

Expanded Definition of Child

Modern families are created in many different ways and sometimes children not legally or biologically related to a person are nevertheless part of the family and considered by the person to be such person’s children. These might be the children of their spouse or intimate partner (or a former spouse or partner), foster children, children who are raised in the household but not formally adopted by such person, or adult stepchildren who are not eligible for adoption. For some grantors, the fact that a child was raised by their descendant or otherwise treated like such descendant’s child is more important than such child’s legal relationship, and a grantor might want such individuals included in class gifts to descendants. For such children raised by the grantor, they can be included as beneficiaries by name. For future generations, the following language could be used:

“In determining the children or descendants of any descendant of mine, for purposes of this instrument and notwithstanding any other provision of this instrument, the “children” of a descendant of mine shall include any individual who at any time was a member of the household of my descendant or was otherwise treated by my descendant as such descendant’s child, including but not limited to stepchildren, foster children or other individuals having a parent/child relationship with my descendant, provided that during my descendant’s lifetime, or within six months after my descendant’s death, the trustee receives a written acknowledged instrument signed by such descendant specifically referring to this trust and stating that it is the intention of such descendant of mine that such individual be treated as my descendant’s child.” 

Section 03

Posthumously Conceived Children

Many grantors have considered and included within the definition of “child” or “descendant” a baby who is in utero at the time of the parent’s death but born after the parent’s death. With the advent of modern reproductive technology and the increasing number of individuals who may have their genetic material stored due to high-risk jobs, health conditions, or having health procedures such as in vitro fertilization, grantors may want to consider whether a baby born from a pregnancy after the parent’s death using such genetic material should be included as a beneficiary. In these cases, the genetic connection to the child has to be balanced with procedures that will not hold up the administration of the trust prior to the child’s birth or place undue burdens on the other beneficiaries to prove whether or not there is genetic material stored anywhere. For grantors thinking about these issues, consider the following language:

Posthumously Conceived Children

In determining whether any person is a beneficiary of any trust hereunder, a posthumous child of a decedent not in utero at the decedent’s death shall be treated as a child of the decedent only if:

a.       The child is born of the decedent’s gametes, whether the embryo is formed before or after the decedent’s death; and

b.       The child is born within 36 months of the death of the decedent; and

c.       The decedent provided written consent for such decedent’s  gametes to be used to conceive a posthumous child of the decedent, and the decedent had not revoked such consent prior to death; and

d.       The trustee receives the following:

  1. If the child is living on the date on which such child’s beneficial interest in the trust would otherwise take place, the trustee receives a copy of such written consent of the decedent within six months after the later of (i) the date such child’s beneficial interest in the trust would otherwise take effect or (ii) the date such decedent’s death certificate is issued; or
  2. If the child is not living on the date on which such child’s beneficial interest in the trust would otherwise take place, the trustee receives the following within six months after the decedent’s death certificate is issued:
    1. A copy of such written consent of the decedent from a person to whom the decedent gave such consent, and
    2. A signed and acknowledged written notice from such person, stating that (i) the decedent’s gametes exist; (ii) the person has the intent to use the gametes in a manner that could result in a child being born within [36] months of the death of the decedent; and (iii) the person has the intent to raise any such child born as such person’s child.

In the event the Trustee receives notice as described in (d)(2) above, any division of a trust hereunder that would have taken place at the time of such decedent’s death shall be postponed, but no longer than [36] months after the decedent’s death, until any such posthumous child is born.  The posthumously conceived child will be treated as in being on the date of the decedent’s death for purposes of determining shares and class membership but will not be entitled to share in any distributions made between the date of the decedent’s death and the date of such child’s birth.

Note: Thirty-six months is the period that has been incorporated into the inheritance statutes in some states, but the grantor can select a different time period. The time period needs to balance the interests of the decedent’s partner who may want to conceive a child and the grantor’s wish to include that child as a beneficiary with the rights of other beneficiaries that may be held in abeyance waiting for the class of beneficiaries to close.

Section 04

Definition of Spouse – Including Civil Unions

Note: The first version below refers only to legal marriage. Per the 2015 U.S. Supreme Court case of Obergefell v. Hodges, 135 S. Ct. 2071, same sex marriages are legal nationwide, which eliminates the need for special language addressing same sex relationships.

Definition of Spouse

As used in this agreement, an individual shall be deemed to be a person’s “spouse” if such individual is legally married to, and not legally separated from, such person as of the date that such determination needs to be made, or as of the prior death of such person, regardless of whether such surviving spouse has subsequently become legally married to another individual; provided, however, that an individual shall not be considered a person’s “spouse” if a petition for marital dissolution or legal separation has been filed with respect to such marriage that has not been dismissed or withdrawn as of such determination date, or as of the prior death of such person.

Definition of Spouse – Including Civil Unions

As used in this agreement, an individual shall be deemed to be a person’s “spouse” if such individual is “legally married” to such person as of the date that such determination needs to be made, or as of the prior death of such person, regardless of whether such surviving spouse has subsequently become legally married to another individual. For purposes of this agreement, “spouse” and “legally married” shall include and apply to persons who are married to each other or joined in a civil union under the law of any state. An individual shall not be considered to be a “spouse” of or “legally married” to a person if they are divorced, legally separated, or if their civil union has been dissolved under applicable state law, or if a petition for marital dissolution, legal separation, or dissolution of their civil union has been filed with respect to their relationship that has not been dismissed or withdrawn as of such determination date, or as of the prior death of such person.

Note: Because the laws regarding domestic partnership vary significantly among the states and local governments, we have not included domestic partners in the sample definition of spouse. In cases where a domestic partnership exists, we recommend the drafting attorney to specifically name the individual(s) involved who are to be included in the definition of spouse, and to also describe a method on which the Trustee can rely in determining if such domestic partnership has been dissolved.

Section 05

Gender Confirmation Included in Specific Gender References

Headings and Context of Terms

Descriptive headings in this trust agreement are inserted for reference purposes only and are not to be considered as forming a part of this trust agreement in the interpretation of its provisions. All words used to refer to any specific gender shall extend to include all genders [and gender identities, including no gender] and any confirmation of gender shall not exclude any beneficiary from receiving benefits conferred upon the beneficiary under this trust agreement. Any singular words shall include the plural expression, and vice versa, specifically including “child” and “children,” when the context and facts so require, and any pronoun shall be taken to refer to the person or persons intended regardless of gender or number.

Footnotes:

  1. United States Census Bureau “America’s Families and Living Arrangements” (2013)

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LEARN MORE ABOUT OUR MODERN TRUST PROVISIONS

We welcome opportunities to work with other advisors to help shared clients fully realize the goals they have for their wealth. To explore how we can collaborate, or request a copy of our Modern Trust Provisions, please request a meeting.

Disclosures

This collection of sample trust provisions is designed to be used by estate planning attorneys only. If you are not an estate planning attorney, please consult with one. This collection of sample trust provisions is made available with the understanding that neither Northern Trust nor any individual who worked on these provisions is rendering legal, accounting, or other professional services through the presentation of this collection.

Although the collection of sample trust provisions is the product of much thought and effort, using this collection is not a substitute for informed legal judgment. The attorney must make an independent determination as to whether a particular sample provision is generally appropriate for a client’s trust documents, how it must be modified for applicable state law and to meet any special circumstances and objectives of the client, and whether or not a different provision or provisions not included in these materials would be better suited for a given client or client situation.

Northern Trust makes no representation that any provision in these materials effectively accomplishes its purpose or is valid under applicable state law. Northern Trust reserves the right to require different or revised provisions in the trusts it administers. Northern Trust assumes no responsibility for the sample provisions or their use. By using a sample provision from this collection, the attorney acknowledges that the attorney (and not Northern Trust) is responsible for any document which the attorney prepares that includes any such provision. The attorney must adapt and customize the sample provision(s) for the law of the applicable state and the client’s specific situation.

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