Succession Planning for LGBTQ* Families - Part 1

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Summary: In the first of two blogs we examine the potential impact of outdated legal terminology on LGBTQ* families.

In the UK same sex couples have been able to enter into civil partnerships since 2005 and marry since 2014.  However, the legal meaning of terms such as child, mother and father have not necessarily adapted to encompass LGBTQ* families.  Using standard succession planning documents may therefore mean that a family’s wishes will not be carried through effectively. Definitions in wills and trusts should be drafted carefully to avoid excluding members of LGBTQ* families. Where definitions in existing trusts or structures mean family members are excluded from benefitting, and changes are not possible, it may be necessary to make separate provision for them.

These issues apply equally to other families outside of LGBTQ* communities, for example, children living with grandparents and blended families where parents are not married.

Legal Terminology - is it inclusive?

While it is trite to say that “one size rarely fits all” for a family’s succession planning, unless standard form documents like wills, trust deeds, shareholders’ agreements and family constitutions are carefully reviewed to take account of a family’s circumstances, it is possible that the provisions will not operate in an inclusive manner.  Definitions of “child” or “spouse” can be problematic if not drafted with reference to a particular family’s circumstances. 

Whose child is it?

If wills, trusts or other documents do not expressly set out what is meant by “child” then the issue will be determined by statute and case law, and minors considered to be “children” of the family may not receive the legacy they were intended to.  The basic position in this area is set out below:

Adoption:

  • Following the enactment of the Family Law Reform Act 1987 there is no distinction made between legitimate and illegitimate children in wills and trusts made after 4 April 1988. 
  • Adopted children are treated as the legitimate children of the adopter(s), and no one else, from the date of adoption.
  • Adoption is generally the only way for a same sex spouse or civil partner to become the second parent of their spouse or partner’s child, but the position is different for female same sex couples undergoing fertility treatment (see below). 
  • Adopted children may be able to challenge their exclusion from the class of beneficiaries of a trust under human rights anti-discrimination legislation – but to avoid costly and time consuming litigation ideally these issues should be anticipated and made clear at the outset in succession planning documents. 

Fertility treatment

The position for parents whose children are born with the assistance of fertility treatment differs depending on when the treatment was received.

Generally, for treatments after April 2009 the parent who carries the child is treated as the child’s mother and that parent’s spouse/civil partner will be the child’s second parent (unless they did not consent to the treatment) in accordance with the terms of the Human Fertilisation and Embryology Act 2008.  It is worth noting that this classification as “mother” may not align with the parent’s preferences, for example, where a transgender male gives birth.  This issue has recently been the subject of judicial consideration and is likely to be appealed to the Supreme Court.   For unmarried couples not in a civil partnership both the mother and their partner must consent in writing for the  partner to be the second parent.  These rules apply whenever the document in question is made. 

For couples who are married or in civil partnerships these rules apply wherever the fertility treatment was provided, but for other couples they only apply if the treatment was provided in the UK by a licenced provider.  

Surrogacy

Statutory surrogacy rules allow couples (from April 2010) and single applicants (from January 2019) to apply for parental orders which broadly have the same effect as an adoption of the surrogate child.  Generally, when a child is born to a surrogate, the following can apply for a parental order within 6 months of the birth:

  • married couples
  • civil partners
  • couples living as partners in an “enduring family relationship”; or
  • single applicants

provided one of them is the genetic parent of the child, the child’s home is with them and one of them is domiciled in the UK and the surrogate (and any other person who is a parent of the child) consents freely and unconditionally.

If these rules do not apply the parent who carried the child is, generally, treated as the mother (but the position is unclear if a donor egg was used) and only the genetic father can be treated as the second parent.  

Risks and Possible Solutions

When drafting new wills, trusts or other succession planning documents make sure that terms like child, grandchild, spouse, partner and beneficiary are clearly defined to include all those intended to benefit, and that there is sufficient flexibility to allow for unforeseen circumstances to be taken into account. Clearly, in order to be able to draft the provisions accurately it is necessary to first take precise instructions on these points.  While this may lead to some interesting and occasionally difficult discussions, it is best to have these at the outset. 

Difficulties can arise if the terminology in older legal documents excludes certain family members from benefitting, as often those documents will also have limited provision for amendment or the addition of beneficiaries. Applications to court to vary the terms of a trust can be expensive and slow, so it is better to identify possible issues early and find appropriate solutions before the problem solidifies.  If the documents cannot easily be amended one solution may be to make appropriate provision for the excluded persons from other family structures or assets, removing the need to address the deficiencies in the trust instrument. 

The best way to address possible concerns is through adequate planning early on.

If you have a question on the above, or would like to learn more, contact BCLP’s Private Client team.

This blog provides a general summary and is for information purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal and tax advice should always be sought before taking or refraining from taking any action.

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