The issue was that her boyfriend, William Kane, was dead. His adult children had taken her to court to challenge her right to use the frozen sperm he had left to her. In a series of lawsuits over several years, the California courts had to decide whether Kane’s genetic material was property, like stocks or real estate, and whether he could dispose of it as he wished.

A court eventually ruled that genetic material is a person’s personal property and is governed by the same probate law that covers other property, with limitations. The court also had to decide whether these not-yet-born children would disrupt the settlement of Kane’s estate, to the detriment of his living heirs. The court ruled that the state cannot establish paternity if the father is dead. Therefore, any “post-born” children would not be recognized as Kane’s heirs and the estate could be settled promptly.

But California has since changed its laws to allow for the recognition of parents of post-born children. This case and its legislative repercussions became precursors to other high-profile family lawsuits. They serve as early warning signs that we are entering a new world of estate planning.

TOP VIEW There are many ways to become a parent today, but estate laws have yet to catch up with advances in the science of fertility. Defining exactly how your new child or children will fit into your family and estate plans—and making sure everyone is clear about your wishes—is the most effective way to address any inheritance issues you anticipate and, ideally, those that you cannot yet imagine.

Traditionally, heirs have been the people who are related to you by virtue of sharing your gene pool, and you could count on knowing the children born to you. But over the past decade since the Kane family’s case emerged, science has sent tradition into a tailspin. There are numerous ways a person can become a parent today. As a result, a will or trust document that seems simple or straightforward at the time it is written can later prompt questions and court wranglings that would have been hard to imagine, much less anticipate, at the time the document was written.

Parental Guidance
Roughly 1 percent of the children born in the United States are the result of alternative reproductive technologies (ART), according to the American Society for Reproductive Medicine in Washington, D.C. In 2002 alone, more than 45,700 ART babies were born. The numbers will likely only increase as technologies advance and become more accessible and as society becomes more comfortable with new reproductive technologies.

The combinations of genetic techniques that can be used to make a baby are dizzying. Parents might use donor sperm or eggs—or both—or donor embryos via artificial insemination, in vitro fertilization or a surrogate mother. The child might be genetically connected to both parents, or one, or neither. Helene Shapo, a professor at Northwestern University’s School of Law, likes to point out that a child born via a surrogate could easily have five “parents”: the two intended parents, the sources of a donor egg and sperm, and the surrogate.

State laws have generally not kept pace with the reproductive options available. The most low-tech approach, sperm donation, has been around for several decades, yet according to Susan Crockin, an attorney in Massachusetts who specializes in law relating to reproductive technology, only 35 states have statutes that clarify the identity and obligations of the intended father, or how to establish that identity. When it comes to newer techniques, even less legal guidance exists. Only 10 states have laws addressing donor eggs or embryos. The laws addressing surrogacy are particularly a patchwork, Crockin says.

Among states where there are laws, there is hardly consistency. Not all states recognize the intended parents as the legal parents from birth. Prospective parents should make certain they understand existing state laws, as well as check with an experienced attorney, estate planner and/or fertility counselor to ensure that all required paperwork and procedures are complete. Some states, meanwhile, might require a parent unrelated by genes to petition the court for recognition before the baby is born. Still others require the parent who is not related to go through a curtailed—or even complete—adoption proceeding after the baby is born.

Laws also change over time as societal perceptions evolve. Dinsmore Adams, an estate planning attorney with Curtis, Mallet-Prevost, Colt & Mosle in New York, points out that as late as the 1950s, unless a person specifically named an adopted family member as the beneficiary of a will or trust, that person would often be cut out. “It was thought that if there was a question, the money should follow the blood,” he says. “That eventually changed.”

Indeed, state law prevails when a person dies without a will or trusts in place. However, even if a parent puts wishes in writing, problems can arise if the documents do not properly address a situation of assisted reproduction. This situation often requires a local judge to weigh in. As Robert Browning, an estate planning attorney with WealthPlan in San Jose, points out, even if a parent and the state recognize a child as entirely the parent’s, that doesn’t mean the child is an heir. Families can seize on language that does not specifically include a child born by alternative means to argue that a distant relative, or even a grandparent or parent, did not intend for the child to be an heir.

Even if a parent and the state recognize a child as entirely the parent’s, that doesn’t mean the child is an heir.

A New York court case decided earlier this year illustrates the unpredictable nature of estate planning as it relates to ART. In 1959, a New York lawyer created a trust that would eventually benefit his grandchildren, however he specified that adopted children “shall not be recognized.” Decades later, one of his daughters and her husband had twins using the husband’s sperm, a donor egg and a surrogate mother in California. The trustees then went to court to determine whether the trust should benefit the twins or if they should be excluded as adopted children.

The judge relied on the fact that California—the home of the surrogate—did not consider the children to be adopted. That state has separate processes for establishing parenthood via adoption and surrogacy. In this particular case, the original trust funder had specified that spouses could receive money from the trust, which indicated to the judge that the man was open to nonblood relations benefiting from it. Because there was nothing in the documents to signal that the man would have wanted to exclude children born through assisted reproduction—which was still science fiction in 1959—the court declared the twins to be their mother’s—and therefore their grandfather’s—descendants who could receive money from the trust.

Adams, one of the attorneys who represented the trustees, says he believes the case has modest precedent value, because it is hard to imagine a similar collection of facts cropping up again. But the case shows how difficult it is to predict how fertility issues will arise in a family and what unexpected questions they might raise.

Genetic Code Breakers
Couples considering pursuing some form of assisted reproduction should investigate state law and family legal documents, and put as much in writing as possible about their intentions before any genetic material is even collected or put into action. “Good estate planning means answering as many what-if questions as possible,” notes Janine Racanelli, managing director of JPMorgan Private Bank’s Asset and Wealth Management Group in New York.

Often there are more of those questions than aspiring parents realize. What happens if one or both parents die before the baby is born? What if one or both parents die before a baby is conceived? Would you want your husband or parents to use a surrogate to create a baby with your eggs or embryos? Would you want your wife or girlfriend to use your sperm? Would you want any of those children to share in your wealth? What if you and your partner separate before your reproductive efforts come to fruition? Would you want your ex-wife to use your sperm to create your heirs, and would you acknowledge them? “You need to be as explicit as possible in these situations,” advises Northwestern’s Shapo, who has written articles on the issue of assisted reproduction and inheritance.

Racanelli is working with a family that is already wrestling with some of these questions. In their case, a father created a trust for his two sons, only one of whom had children when the father died. If the other son died without any offspring, then his brother’s children would eventually receive all assets in the trust. One son indeed died childless, but a year later, his wife became pregnant with sperm he had earlier frozen. He did not make clear whether he wanted his sperm to be used posthumously or if he wanted to recognize a resulting child as his heir. Now the family is forced to decide. “Was the sperm intended for that, and is that child his heir?” Racanelli asks.

States have split over whether posthumously conceived children are heirs for the purpose of social security and other benefits. There is no clear answer to these questions as of yet. If a family includes a child in his father’s estate and it is later judged they did so improperly, it could trigger unintended gift and estate taxes, Racanelli notes. Moreover, given the dynamic nature of fertility laws, trustees might make a decision today that can later be challenged. “They might be sued by the rest of the family,” points out Gail Cohen, general trust council for Fiduciary Trust International in New York.

Even in cases when families do not foresee becoming adversarial, Racanelli notes, they should prepare for the evolving environment of this legal field to force trustees to take these cases to court for a clear ruling. “This is the kind of thing that can cause family wealth to erode,” she explains. Particularly if there are disgruntled family members, but even if there are not, lawyer and court fees can quickly add up, while distracted trustees will utilize precious resources preparing legal documents instead of managing investments.

In addition, if courts do make way for these posthumously born children to be considered heirs, it could delay the settlement of an estate for years. If a man leaves behind sperm that’s viable for 10 years, you might have to leave the estate open for that long, or until the wife or partner makes it definitively clear that she will not seek to use that sperm to become pregnant, Racanelli notes.

So advisors are urging their clients to spell out their wishes clearly. Spouses who face fertility issues in a second marriage, and who have children from a prior marriage to consider, seem to be more likely than others to be proactive. WealthPlan’s Browning has a client who recently came to him to set things in order before conceiving a child with his second wife, in vitro, using his sperm. “He wanted to make sure [his] kids from the prior marriage received their fair share,” Browning explains. “His concern was that if they divorced or if he died, she might get pregnant again to get a larger piece of the pie, so to speak.” Browning and his client made certain his trust documents identified his children as those from his first marriage and one from the second marriage. “It specifically excludes any children born after this one,” Browning says.

Such a move might seem cynical or even unduly harsh, but given today’s new reproductive realities, it is prudent. “You want to avoid giving people room to challenge your intent,” Racanelli says.

Eileen P. Gunn is a Brooklyn-based writer who has written about personal finance, executive careers and real estate, among many other topics.

Illustration by Isabelle Arsenault.