Money can trigger emotions that can tear families apart, but sometimes it can also spur generosity and kindness.
Eleanor* left a share of her estate in trust to provide for her daughter and her daughter’s children. Everything was working smoothly until a legal adoption almost derailed those plans.
Eleanor’s estate provided her daughter with an income during her life. It was an important structure given her daughter suffered from personal issues, which led to her three boys spending time in a foster home.
Eleanor’s instructions were clear – when her daughter died, the remaining assets should vest and be distributed to her daughter’s children. Unfortunately, one of the boys had been legally adopted out of his birth family to a different family during the intervening years.
“It meant that he was no longer regarded as the biological child of the daughter,” Trust Manager, Rakesh Lal, says.
“If you’re legally adopted, your birth certificate is cancelled, and you’re issued a new birth certificate that shows the parents who adopted you. When somebody is legally adopted, it has legal ramifications and people should be aware of that.”
The legal process of adoption involves a court order that severs the legal ties between the child and their biological parents and establishes a new legal parent-child relationship with the adoptive parents. This usually means – as in this case - loss of biological inheritance rights.
It provides an important lesson about the power of good financial and estate planning advice to ensure the intent of the will maker is met despite any unforeseen issues.
Once Rakesh had confirmed the legal ramifications, he informed all of the parties involved, to the disappointment of the adopted brother. The two brothers who were entitled to their grandmother’s remaining assets then made a selfless decision.
“The other two kids said, ‘Look, we’re happy to give him an equal share from our own share because this is what our grandmother had intended and we want to fulfill her wish’.”
The unprompted decision was all the more surprising given the three brothers were not particularly close. The two brothers were also far from wealthy, and while their grandmother’s inheritance was relatively modest in size, it could have significantly improved their lifestyles.
“There are people – your average Aussie battlers – who are prepared to share their wealth. I said to myself, ‘Wow that’s amazing.’.”
* Name changed to protect privacy.
More information about Equity Trustees’ wills and estate planning services is available on our website