Al & Lore: A Story of Practical Estate Planning

Al & Lore a story of practical estate planning.In December 2011, Al and his niece Lore undertook a sincere gesture of love and practical estate planning. Al is widowed with no children of his own, and he and his niece, Lore, have had a father-daughter bond since her birth.

Lore’s mother and biological father are both deceased, and Al wishes to honor her as his estate beneficiary. By Al adopting her under New Jersey’s Adult Adoption Statute, Lore will not be subject to inheritance tax of 15% as a Class “D” beneficiary. Rather, she is now a Class “A” beneficiary, exempt from inheritance tax, and her bond with Al as her true father figure is now solidified. On the day of the adoption, all the other cases on the docket were adoptions of children. Loud applause and cheers continuously came from the courtroom. As Al and Lore’s case was called, the judge joked and asked if she would have to give Lore a coloring book to get through the proceedings.

Everyone giggled, and Stacey Pilato replied that it would be nice, however, if she had a lollipop to give Lore at the end of the proceeding. The adoption was heard and very emotionally received. After Ms. Pilato handed the judgment drafts to the bailiff, she turned around to find Lore smiling and laughing with a gigantic chocolate lollipop, courtesy of the judge!

Al passed away in 2014, joining his late wife. His estate has been administered and the tax savings created by the adult adoption were significant. We were honored to know Al and participate in his loving gesture for Lore.

New Jersey’s Adult Adoption statute permits the adoption of one adult by another if, among other requirements, the elder is at least 10 years older and the adoptee requests the adoption. Upon entry of the judgment of adoption, unlike adoption of a minor, the adopted adult is not required to change his or her birth certificate and does not lose the right to inherit from his or her own biological family. But rather, the adoptee is inserted into the adopting parent’s lineage. Stacey has participated in several adult adoptions, most for the purpose of removing the inheritance tax burden of an intended beneficiary. She has also applied the statute in one unique matter, for the purpose of creating standing as a grandparent in the court for an elder who fulfills a hands-on grandparent role to the adoptee’s children. The judgment of adoption can serve to strengthen the adoptee’s custodial rights to prevent the children’s other parent from removing the children from an established family unit where the children’s best interests are met due to the involvement of the grandparent.

The most famous embattled estate involving adult adoption in New Jersey was that of tobacco heiress Doris Duke, who, in her mid-70s, adopted a 35-year old woman whom she believed was the reincarnation of her only child who died at birth. Duke disinherited her adopted child approximately six years later and attempted to negate the adoptee’s right to benefit from trusts Duke’s father established. Duke’s personal estate was for the most part left to charity. Of course, the disinherited adoptee sued. The estate, worth more than one billion dollars, ultimately settled the matter with the disinherited adoptee for $65 million.

(Photo reprinted with permission.)