Blank Rome LLP

Modern Families: Providing For Posthumously Conceived Children

June 22, 2012

New York Law Journal

On May 21, 2012, the Supreme Court decided Astrue v. Capato,¹ which involved an application for Social Security survivor benefits for children conceived² after the father's death. The court agreed with the Social Security Administration that in order for a posthumously conceived individual to qualify as a "child" for purposes of entitlement to federal survivor benefits, he or she must first be determined to be the decedent's child under the intestacy laws of the decedent's last state of residence.

The case, described in greater detail below, involves only entitlement to federal benefits, but it highlights the importance of this quickly evolving area, where cutting edge biology interfaces with property rights and entitlements established under state law often well before anyone could have imagined today's reproductive technologies and the possibilities these offer. As an increasing number of individuals plan to have children via assisted reproductive technology (ART), it is to be expected that an increasing number of children will be conceived after the death of the sperm donor or egg donor parent.³ Even where it can be clearly established that a posthumously conceived individual is the genetic offspring of the gamete donor parent,⁴ it is often not clear whether such offspring will be treated as the legal descendant of such parent for purposes of property distributions under a will or trust or in intestacy. The property at stake may be that of the deceased donor parent, or that of another, most often an ancestor of such parent.

A brief review of the law in New York will illustrate the complexity of this topic, which cannot be adequately addressed in the space of this column, as well as the need for clarifying legislation.

Wills and Trusts

Under New York Estates, Powers and Trusts Law (EPTL) §5-3.2, which describes when a testator's after-born children—those born after the testator executed his will—are entitled to share in their deceased parent's testamentary estate, an "after-born child" must be born during the testator's lifetime or be in gestation at the time of the testator's death and born alive thereafter.⁵ Consequently, a posthumously conceived child⁶ could not rely upon the statute to take as a child under the deceased parent's will.⁷

EPTL §2-1.3 addresses distributions to members of a class of "issue, children, descendants, heirs, heirs at law, next of kin, distributees (or by any term of like import) of the creator or another," and states that in the absence of an expression of the creator's contrary intent, such term will include children conceived before, but born alive after, a disposition becomes effective.⁸ Interestingly, this statute is broader in scope than EPTL §5-3.2, which deals only with wills and only with determinations of whether the testator's posthumous child—but not the posthumous child of another individual—will be entitled to a share of the estate.

While finality of administration is a compelling consideration for a testamentary estate, it may be less so, for example, in the administration of many trusts. Also, EPTL §2-1.3 does not necessarily preclude a posthumously conceived child: It was not revised to refer to gestation like EPTL §5-3.2, it was enacted at a time when posthumous conception was not contemplated, and it states that children conceived before but born alive after are included in such class gifts, which is not the same as limiting the class to preclude those conceived and born after the disposition becomes effective.

As noted, different considerations regarding finality are involved when it is not an estate but rather a trust, particularly one created by someone other than the parent of the posthumously conceived child. Just such a case was decided by Surrogate Renee Roth in In the Matter of Martin B.⁹ The court found that whether two posthumously conceived children of the grantor's deceased son would be beneficiaries of several sprinkling trusts depended largely on the intent of the grantor.

James' father was the grantor of several trusts for the benefit of a class that included James' "issue" or "descendants." After learning he had Hodgkins lymphoma, James deposited his sperm and left instructions that it be cryopreserved and subject to his wife Nancy's control in the event of his death. Two children were born to Nancy more than three and five years, respectively, after James' death using his cryopreserved semen.

The court concluded that the grantor intended that the trust funds would benefit his sons and their families equally and "a sympathetic reading of these instruments warrants the conclusion that the grantor intended all members of his bloodline to receive their share."¹⁰ Consequently, the posthumously conceived children were treated as trust beneficiaries. The court also noted that a need exists for a legislative response to address this issue and others raised by the advances in ART.

Distributees conceived before and born alive after the death of the intestate decedent take as if they were born during the decedent's lifetime.¹¹ (This overcomes the requirement that one must survive the decedent in order to be an intestate taker: If one is not in existence at the intestate's death, one could not have "survived" him.) Since a child conceived after the death of an intestate parent does not fall into this carefully limited class of takers in intestacy, she ostensibly would not be entitled to take a share of her intestate parent's estate (although it is possible to argue that posthumous conception was not contemplated with the intestacy statute and thus such a limiting construction is not definitive).¹² Note also that if the intestate is a grandparent or uncle, for example, of a child conceived and born after her own father's death, so long as the child was born or at least in gestation during the grandparent's (or uncle's) lifetime, even if conceived posthumously with regard to her own parent, she would be an intestate taker of her grandparent's or uncle's estate.

'Astrue' Case

New York's intestacy law would also be applied to determine whether the posthumously conceived child of a state resident is entitled to Social Security survivor benefits, as illustrated by the unanimous decision of the Supreme Court in Astrue v. Capato. The facts here were similar to those of other cases involving entitlement to federal survivor benefits.¹³

Karen and Robert Capato married in May 1999. Sadly, Robert was diagnosed with esophageal cancer shortly thereafter. Prior to undergoing chemotherapy treatment that could have rendered him sterile, Robert deposited his sperm at a sperm bank, where it was frozen and stored. Robert underwent treatment, but died in March 2002 a resident of Florida. Karen conceived with Robert's frozen sperm the following January, and gave birth to twins in September 2003. Robert's will made no provision for children conceived after Robert's death, although the Capatos told their lawyer they wanted future offspring to be placed on par with Robert's children from a prior marriage.

Karen applied for Social Security survivor benefits on behalf of the twins, but the Social Security Administration (SSA) denied her application, because, in accordance with the SSA's reading that 42 U.S.C. §416(h)(2)(A) was controlling, the twins would qualify to receive benefits only if they were eligible to inherit from their father under provisions of Florida's intestacy laws. Florida law directs that a child is ineligible to inherit from a parent who predeceased the child's conception; consequently, the Capato twins were found ineligible to receive survivor benefits. The U.S. District Court for the District of New Jersey affirmed the SSA's decision.

The U.S. Court of Appeals for the Third Circuit reversed, concluding that because the twins were the undisputed biological children of Robert, they were eligible for survivor benefits as a matter of federal law pursuant to 42 USC §416(e), without regard to their status under Florida's intestacy laws.

The Supreme Court agreed with the SSA's construction of the statute and agreed that the statute was designed to provide "dependent members of [a wage earner's] family with protection against the hardship occasioned by [the] loss" of the wage earner's earnings.¹⁴ Finding that the SSA's approach of applying state intestacy laws to determine federal eligibility status was reasonable, the court established that the eligibility of posthumously conceived children to receive federal survivor benefits will differ depending on the deceased parent's state of residence, and will depend only on the intestacy laws even if the parent in fact died testate.

Planning

Until and perhaps even after there is a comprehensive legislative response to the issue of property rights of posthumously conceived children, attorneys cannot be confident they have addressed such a situation in the absence of specific language in the will or trust. The topic may be a difficult but nonetheless a necessary one to discuss with a client, particularly when the client's documents include trusts intended to be operative for many years.

Legislation and proposed legislation may offer some guidance. The Uniform Parentage Act, which has been adopted by a number of states,¹⁵ provides that a posthumously conceived child will be considered a child of the deceased parent (and the decedent will be deemed the parent) only if the decedent agreed to the use of assisted reproduction after his death.¹⁶ Several states have enacted similar laws with a specified time period during which a child would have to be conceived or born.¹⁷ Legislation introduced in New York provided that if maternity or paternity were established by clear and convincing evidence, and certain other conditions were met, a child posthumously conceived within two years of the parent's death would be entitled to be treated as a child for purposes of intestacy.¹⁸

Planners should consider drafting specific will provisions to govern posthumously conceived children, both of the testator and the testator's descendants. Such a provision could, for example, require that (i) the deceased parent had given permission for use of his or her genetic material by the surviving parent, (ii) any such child be born within a certain time period after the deceased parent's death (two years being a frequently used period), and (iii) paternity or maternity be established in some prescribed manner, e.g., to a substantial certainty using prevailing scientific methods, or by such proof as would be required under the law of the testator's domicile if the testator were living and the child were to allege (and the testator to dispute) paternity or maternity. A provision in an inter vivos trust may, if consistent with the settlor's wishes, be similar to the above or might be more liberal in allowing individuals conceived more than two years after the deceased parent's death to be included in beneficiary classes.¹⁹

In all case where gametes or embryos are frozen, the disposition and control of genetic material and/or embryos in the event of the genetic parents' divorce or death must be discussed and addressed. Until there is further legislative clarification, individuals using ART to conceive a child should record their intent regarding posthumous use of genetic material in documents left with the ART treating physician at the time of sperm or egg donation or when an embryo is frozen. The best venue to record intent concerning inclusion of the posthumous child in property dispositions is, of course, the relevant estate planning document, but as it is not uncommon to postpone these documents or fail to update them in time, recording intent with the physician may offer proof of one's own intent.

In appropriate cases, individuals using or planning to use ART may wish to advise their own parents so that they, too, may make special provisions regarding their genetic descendants. Further advances in ART will only increase the number of posthumously conceived children that are born, and advance planning will allow the intent of each testator or settlor to be made explicit, hopefully obviating resort to a court's interpretation.

Endnotes:

1. 566 US ___ (2012). Slip Opinion No. 11-159 (2012).
2. As a biological term, "conception" is generally defined to mean the fertilization of an ovum with a spermatozoon, resulting in the creation of a zygote with half of its genetic material from each parent. The zygote then develops through cell division into an embryo and thereafter from embryo into fetus. T.H. Milby, "The New Biology and the Question of Personhood: Implications for Abortion," AMJL and Med 31, 35 (1983). The law has not been so careful in its use of the term conception, perhaps due to reproductive biology's advancement faster than the evolution of the laws implicated or affected by it. The relevant New York statutes, some of which have not been modified in this respect in recent years, are neither accurate nor consistent in their usage of terminology. Cf. EPTL §5-3.2 ("gestation" that commences prior to a parent's death is the focal point), with the less precise EPTL §§2-1.3 and 4-1.1 (referring to "conception" that occurs before the death of a parent). A child who develops from an embryo created and frozen while both biological parents are living but which does not begin gestation in utero until after the death of a parent is "conceived," in a biological sense, while both parents are alive and thus is technically not within the ambit of either EPTL §2-1.3 or §4-1.1. To avoid ambiguity, it would be preferable to refer to a child whose gestation commences after the death of a parent as a posthumously gestated child rather than a posthumously conceived child, but we will use the latter as that is the term in most common usage. Thus, "conceived" as used herein, will refer to the time following implantation of the embryo in the uterus, i.e., when gestation commences.
3. We assume here that the donor retained rights and control over his or her donated gametes and is not an anonymous donor who relinquishes rights thereto.
4. This article does not delve into the area of proof of paternity, which since 2010 may be made posthumously by a genetic marker test even without the decedent's open and notorious acknowledgement of the child as his offspring. In these cases generally, the child is born before the decedent's death. It must be noted that should a posthumously conceived child be required to prove his or her paternity to inherit from or through the father, one who banked his sperm presumably would have left adequate records so that this would not be an issue. Further, while most if not all cases in this area have involved a deceased father, it is just a matter of time before a donated ovum is fertilized posthumously and carried by a surrogate mother or where a frozen embryo is implanted in a surrogate mother and the same issues of proof of genetic lineage will arise and be met with medical records. We assume for this article that the proof has been accepted that the posthumously conceived individual is the biological descendant of his or her mother and father and the issues are legal, not factual. We make no distinction between marital and non-marital children and do not discuss property or other rights to dispose of unused genetic material and embryos.
5. EPTL §5-3.2(b) was amended effective July 26, 2006, to specify that a posthumously born child must be in gestation during the deceased parent's lifetime in order to be treated as a child of such parent.
6. See note 2, which describes the assumption that "posthumously conceived" means not in gestation prior to death.
7. The legislative history that accompanied the amendment of EPTL §5-3.2(b) reflects the concerns that a child could be posthumously conceived without the testator/parent's consent and that such a child's claim to a share of the testate estate would unduly complicate and prolong administration of the estate. Further, it notes that a testator who wishes to provide for posthumous children could readily do so by specific provision in his or her will. It is submitted that the last argument could apply with equal force to many cases where EPTL §5-3.2 would provide an afterborn child with a share of the testator's estate. It seems only where the testator had children at the time he (or she) executed the will and left all of them out that it is reasonable to assume he (or she) would not want biological descendants born posthumously to share.
8. A parallel provision regarding the rights of a posthumous child to share in future estates found in EPTL §6-5.7 includes no reference to the time of conception of the posthumous child. Again at the time of its enactment, it was not possible for a posthumous child to have been other than one en ventre sa mere or in utero.
9. 841 N.Y.S.2d 207 (Surr. Ct. New York County 2007).
10. Id at 212.
11. EPTL §4-11(c).
12. See also footnote 2, supra, which discusses conception as distinct from gestation, making it arguable that where embryos were frozen during the parents' lives but implanted after death, the offspring would be permitted to inherit.
13. See, for example, In re Estate of Kolacy, 753 A.2d 1257 (N.J. Super. 2000), Woodward v, Commissioner of Social Security, 760 N.E. 2d 257 (Mass. 2002), and Eng Khabbaz v. Commissioner, Social Security Administration, 930 A.2d 1180 (N.H. 2007).
14. 566 US at ------, Slip Op at 13, citing Califano v. Jobst, 434 US 47, 52 (1977).
15. Such states include Delaware, North Dakota, Oklahoma, Texas, Utah, Washington and Wyoming.
16. Uniform Parentage Act §707.
17. See, for example, Cal. Prob. Code §249.5 (child must be in utero within two years of the death of the donor parent), Louisiana Rev Stat Ann §9:391.1 (child must be born within three years of the father's death) and Iowa Code Ann. §633.220A (child must be born within two years of the death of the donor parent). See also Restatement (Third) of Property (Wills and Other Donative Transfers) §14.8, and §2.5 comment l (1999) ("a child produced from genetic material of the decedent by assisted reproductive technology must be born within a reasonable time after the decedent's death in circumstances indicating that the decedent would have approved of the child's right to inherit.")
18. A03051 introduced in the 2011-2012 session but not passed.
19. Care should be taken to avoid an overly expansive provision that may violate any applicable Rule Against Perpetuities, but this should be "curable" with an appropriate savings clause.

Reprinted with permission from the June 22, 2012 edition of the New York Law Journal © 2012 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.