Adoption and Inheritance, Part 3: When the Adopted Out Beneficiary Dies Before the Birth Parent

In 1924,  Mildred Murphy gave birth to a son whom she named Arthur.  Arthur went to live with the Manning family who renamed him Clair Willard Manning. The Mannings officially adopted Clair in 1944 when he was 19.  Sometime after World War II, Mildred and Clair re-established contact.  Mildred had no other children.

Clair would eventually have four children of his own.

In 1998, Mildred executed a Will with this relevant provision:

"Fifth. I give, devise and bequeath to Clair W. Manning of Wellsboro, PA the real property owned by me on Keuka Lake, located at 132 and 134 West Lake Road, consisting of a cottage, extra lot and boathouse together with all of the contents and property located therein and thereon. I further give and bequeath to Clair W. Manning the sum of Eight thousand dollars ($8,000.00)."

She also bequeathed half of her residuary estate to Clair, the remaining half to go to her sister-in-law, Evelyn Beckman.  Mildred passed away on Valentine's Day 2002, having been predeceased by Clair on 4 March 2001.

In my previous post, I considered the issue of class gifts and the requirement under New York law that an adopted out child be specifically named in a Will or a trust in order to inherit from a birth parent as illustrated by the Matter of Piel case.   For the purpose of inheritance, Domestic Relations Law (DRL) § 117 terminates the adopted-out child’s right to inherit from the biological parents unless the adopted out child is specifically named, but at the same time gives the adopted child the right to inherit from the adoptive parents. 

Today's fascinating case, Matter of Murphy, presents another twist on that same theme.  In Murphy, the New York Court of Appeals case focused on the rights of the children of an adopted out child who had been named in his birth mother's Will but who had predeceased her.   In this case, the court had to construe two very relevant statutes that implicated each other but did not reference each other.  In Murphy, the Court of Appeals bridged these two statutes and at the same time extended the rights of the issue of adopted out children who are named beneficiaries in a Will.

As Judge Rosenblatt noted in his majority opinion, at issue was the definition of "issue."  Can the children of a named adopted out child inherit the adopted out child's gift, or does the gift lapse and fall into the residuary estate?  More to the point, what is the interplay of New York's anti-lapse statute (EPTL 3-3.3) with the statute governing the inheritance rights of adopted children (DRL § 117(2)(b)), particularly with respect to descendants of a named adopted out child in a Will (see my prior posting on Matter of Piel)?

What is the anti-lapse statute? The anti-lapse statute takes effect when the beneficiary under a Will dies before the testator because the law does not permit a gift to be made to a deceased person.  The anti-lapse statute "saves" the gift and passes the gift on to the issue of the deceased beneficiary.  However, the law applies the statute to a very narrow band of persons.  The anti-lapse statute applies only when the deceased beneficiary was the issue, brother, or sister of the testator, and when the deceased beneficiary has issue (children) who survive the testator.

There are three additional important provisions concerning the anti-lapse statute.  First, the anti-lapse statute will only go into effect as a result of a Will.  If a person dies without a Will, the law of intestacy will apply (see my prior post on the difference between a beneficiary and an heir), meaning that the adopted out child cannot be an heir of their birth parent.  Secondly, the anti-lapse statute trumps the deceased beneficiary's Will with respect to the inherited gift because the law names the substitute taker.  Finally, if a gift in a Will is conditioned upon the survival of the beneficiary, it will automatically rule out the application of the anti-lapse statute.

Note that the anti-lapse statute makes no direct reference to the inheritance rights of adopted out children.  The adoption law (DRL § 117(2)(b)) is also silent with respect to the anti-lapse statute. New York law provides for full inheritance rights of adopted children from their adopting family (and vice versa), but inheritance rights of adopted out children are severed from their natural parent or kin unless (1) they are expressly named in a Will or trust; (2) they are adopted by the spouse of a natural parent, in which case the child and his issue can inherit from the adopting parent and either natural parent; or (3) the child is adopted by a relative, in which case the child can inherit under the adoptive relationship. 

Furthermore, under the terms of the anti-lapse statute, if the child is adopted out by a brother or a sister of the testator (the birth parent),  then the adopted out child qualifies as a substitute taker under the anti-lapse statute.  If the child is related by both adoption and a natural relationship, then the adopted out child inherits under the natural relationship.  This would be the case when the child was adopted by an aunt, for example, and the aunt's mother (the child's natural grandmother) dies.   The adopted out child would inherit as a natural descendant of the grandmother.  If the adoptive aunt predeceased the adopted out child, then the adopted out child could take under the anti-lapse statute.

Under New York law, adopted out children are considered "strangers" with respect to their birth mothers for the purpose of inheritance, even if they re-establish a relationship.  The adopted out child inherits from the adoptive parents and, as a result, so do their children (issue).  The adopted out child may inherit specific bequests or class gifts from the birth parents only if specifically named in the Will.  The law is silent as to the operation of the anti-lapse statute in such a case. 

Does the act of naming of an adopted out child in a Will change that person's status from "stranger" to "issue"?  This is what the court in Murphy was asked to decide.  If the answer was yes, then the anti-lapse statute would be in effect and Clair's children would inherit his bequest.  If  the answer was no, then Clair's gift would fall into the residuary estate and Evelyn Beckman would inherit all of the residuary estate.

The court found in favor of the Manning children.  "We therefore conclude that when Mildred Murphy named her adopted-out son Clair as a beneficiary of her will, she triggered the condition in section 117 (2) that made him a nonstranger, and thus her issue, with respect to the relevant bequest. His children, therefore, are entitled to the benefit of the anti-lapse statute."

What Murphy means in practice is that a child adopted out by strangers receives the same rights as a child adopted out by a close relative (brother or sister of the testator), merely by being named in the testator's Will.  Murphy extends the inheritance rights of the named adopted out child's issue under the anti-lapse statute and puts them on equal legal footing with a child adopted out by a sister or brother of the testator.  And because the anti-lapse statute overrides the deceased beneficiary's Will by operation of law, it may have the unintended consequence of defeating the original testator's estate plans or the estate plans of the predeceased beneficiary.

The Murphy case points out once again the necessity of working with an attorney to draft your Will and tailor it to your individual needs.  Though it may seem contrary to nature, children at times do predecease their parents, and this reality must somehow be accounted for in your Will.  Your attorney will work through some scenarios with you to make sure that all of your wishes are met and executable.  No boilerplate form can do this kind of reasoned and careful drafting befitting your individual needs.  

In the next segment of this series, I will look at yet another fascinating New York case involving adopted-out children and inheritance rights. I invite you to join my list of subscribers to this blog by clicking on "Subscribe to" on the left-hand side of the page so that you can receive a notification when the next installment has been published. Thank you.

Adoption and Inheritance in New York, Part 1. A Brief History of the Issue

As a young girl, I was fascinated by the stories of Anne of Green Gables (1908), Pollyana (1913), and the comic strip Little Orphan Annie (1924).  These stories of adoption spoke to me of acceptance and of intergenerational care.  What I did not realize at the time was that these stories also reflected a new trend in the history of adoption and of family construction, a shift from an emphasis on strict bloodlines for the purpose of inheritance to the acceptance of adoption to create or expand a family.  

As in other jurisdictions, adoption in New York is, strictly speaking, a creature of the law.  The law in New York concerning inheritance rights of adopted children would also change as a result of changes in society, creating a uniquely legal concept of the family through the expansion of inheritance rights to include the adopted child.  Literature and the law would walk hand in hand to bring about change.

The story of Anne Shirley in Anne of Green Gables represents a transitional phase in the history of adoption.  Marilla and Matthew Cuthbert, sister and brother, had decided to adopt a boy to help them out on the farm because they were getting too old to take care of the chores themselves.  Orphanages in the 19th century regularly adopted out children as a form of cheap farm labor.  Through a series of mishaps, the Cuthberts received precocious Anne instead.  With her flaming red hair and freckles, Anne's cheery disposition soon warmed the heart of Matthew and even crusty Marilla, exemplifying the more desired kind of adoption based on sentiment rather than work.  This desired kind of adoption would progressively finds its way into the spirit and language of the law.

Anne's flaming red hair is also the dominant characteristic of Little Orphan Annie.  Based upon Indiana poet Charles Whitcomb Riley's poem Little Orphant Annie (1885) written in the Hoosier dialect, Riley's Annie is adopted out to be a household servant. 

Little Orphant Annie's come to our house to stay,

An' wash the cups an' saucers up, an' brush the crumbs away,

An' shoo the chickens off the porch, an' dust the hearth, an' sweep,

An' make the fire, an' bake the bread, an' earn her board-an'-keep;

But Annie also had an unusual gift:  she could spin goblin stories for the children after the evening meal, morality tales where the children are exhorted to obey their parents.  The poem focused on the beneficial moral effects of the adopted child, in contrast with real orphans who often were associated with disorderly conduct, ignorance and poverty.

Annie would not have ridden out on an orphan train, a particularly painful part of the history of adoption in New York from 1854-1929.  The orphan train was the brainchild of New York Protestant reformer Charles Loring Brace, author of The Best Method of Disposing of Our Pauper and Vagrant Children (1859).  Alarmed at the growing number of homeless and disorderly children in New York, particularly Irish Catholic immigrant children who had arrived during the Irish Potato Famine, Brace feared that crime would increase in the city as a result.  His Children's Aid Society placed out only boys to rural regions of America, in what was in large part a contractual arrangement.   

Riley's Annie became the prototype for Harold Gray's syndicated cartoon Little Orphan Annie (1924), which appeared at the height of the Progressive Movement in the United States.  The Progressives Movement in New York would make significant inroads in adoption reform in the United States. 

Massachusetts had passed the first adoption law in 1851, the first law .  Section 6 dealt with the issue of inheritance.

"A child so adopted, as aforesaid, shall be deemed, for the purposes of inheritance and succession by such child, custody of the person and right of obedience by such parent or parents by adoption, and all other legal consequences and incidents of the natural relation of parents and children, the same to all intents and purposes as if such child had been born in lawful wedlock of such parents or parent by adoption, saving only that such child shall not be deemed capable of taking property expressly limited to the heirs of the body or bodies of such petitioner or petitioners."

If the adopting couple was childless, then the adopted child could inherit freely from the adoptive parents.  However, if the couple already had natural children, the law prohibited the adopted child from inheriting from the adoptive parents.  Under the law, adopted children were not considered to be the equals of natural children with respect to inheritance rights. 

New York began amending its adoption laws beginning in 1873.  One feature of New York's early adoption law with respect to inheritance was a provision that allowed adopted-out children to inherit from their natural parents (In re Landers’ Estate, 100 Misc. 635, 166 N.Y.S. 1036 (Sur. Ct., Oneida Co. 1917)).  In 1963, New York amended its adoption statute Domestic Relations Law (DRL) § 117 with respect to inheritance.   For the purpose of inheritance, the amended law ended the adopted-out child's right to inherit from the biological parents, but at the same time gave the adopted child the right to inherit from the adoptive parents.

The law was amended in 1966, giving the biological parent the right to provide a bequest to an adopted-out child by last will and testament.  For the first time, the law also addressed the issue of a child who was adopted by a step-parent, an acknowledgement that new family relationships were also being forged by remarriage.

In 1986, as a result of a Court of Appeals decision in In re Best, 66 N.Y.2d 151 (1985), the law was amended to state that the adopted-out child was deemed a "stranger" with respect to the biological parents.  The adopted-out child may not inherit from the natural parents through a class gift in a will or a trust, or through intestacy.  However, the adopted-out child can still inherit from the biological parents if the adopted-out child is specifically named in the biological parent's will or trust.  In the case of a class gift, the adopted-out child must be specifically named as belonging to that class.

However, the new law created particular issues with respect to step-families and with respect to inheritances from grandparents.  The law was quickly changed in 1987 to provide for inheritance rights if  (1) the child’s adoptive parent is (a) married to the child’s birth parent, (b) the child’s birth grandparent or (c) a descendant of such grandparent; and (2) the testator or creator is the child’s grandparent or a descendant of such grandparent (DRL § 117(2)(b)).  This remains the law in New York with respect to inheritance rights of adoptees.

This brief history into the the inheritance rights of adopted children in New York is yet another reason as to why you should have an attorney draft your Will instead of relying on boilerplate forms that are not tailored to your unique situation. After all, no person’s estate and family situation is like any other, and your uniqueness should be reflected in the way that your Will is prepared: a Will that is specifically drafted for you. Your Will is, after all, one of the most important documents of your life and you should have the benefit of expert legal assistance in drafting it.

In the next segment of this series, I will look at some specific and fascinating New York cases involving adopted-out children and inheritance rights.  I invite you to join my list of subscribers to this blog by clicking on "Subscribe to" on the left-hand side of the page so that you can receive a notification when the next installment has been published. Thank you.