Modern Estate Planning In the Age of Genetic TestingModern Estate Planning In the Age of Genetic Testing

As tax laws and estate-planning strategies become increasingly intricate, family structures are also undergoing significant transformations. Modern families now extend beyond traditional definitions, encompassing blended families, same-sex couples, step-relatives and individuals connected through genetic testing or surrogacy. These evolving dynamics necessitate a nuanced approach to estate planning, addressing both legal and personal complexities.

Concurrent with these changes, direct-to-consumer genetic testing services, such as Ancestry.com and 23andMe, have become increasingly popular and accessible. These services allow individuals to uncover previously unknown aspects of their genetic makeup and familial history.  

Indeed, the direct-to-consumer genetic testing market is projected to reach approximately $17.35 billion by 2033, growing at a compound annual growth rate of 24.43% from 2024 to 2033.¹ Users of these websites can mail in DNA samples, which are then processed and cataloged to reveal personal information later. These platforms have brought genetic exploration mainstream, offering users a simple way to learn about their ancestry, health risks and inherited traits through an easy process.

While many users turn to genetic testing to explore their ancestry, these services can sometimes yield surprising and unintended outcomes. Genetic testing can uncover unknown relatives, revealing family secrets such as extramarital affairs, sperm or egg donations and previously undisclosed adoptions. Such revelations can cause familial strain and pose new challenges beyond navigating newfound relationships, particularly as they challenge long-held assumptions about family relationships and matters on inheritance.  

The emergence of unexpected relatives raises critical questions about inheritance rights, often necessitating updates to wills, trusts and other estate-planning documents. These challenges expose gaps in conventional estate planning and highlight the need to reconsider terms like “descendants” and “heirs” in light of these evolving realities.

Let’s examine the profound impact of genetic testing on estate planning, offering practical considerations around the complexities of modern family dynamics.  

The Changing Definitions 

Historically, estate planning relied on traditional definitions of “family,” which were created through biological, adoptive or marital relationships. Terms such as “children,” “descendants,” “heirs” and “issue” were commonly used in wills and trusts to designate beneficiaries. These terms were generally understood to refer to specific, legally recognized family members and were based on the testator’s or settlor’s recognition of these individuals. However, advancements in genetic testing and the increasing accessibility of these services have disrupted these traditional definitions. Namely, an individual might discover a biological child they didn’t know existed due to a past extramarital affair, or someone who assumed they had no living siblings might learn through genetic testing that they have half-siblings or biological siblings previously undisclosed to them.

Legal Implications 

A primary concern arising from the discovery of unexpected relatives through genetic testing is the potential impact on inheritance. In many jurisdictions, if an individual discovers a previously unknown relative, that relative may be entitled to a portion of the estate of a parent or other relative, depending on the jurisdiction or the terms of the existing estate-planning documents.

Effect on dying intestate. When an individual dies without a will (intestate), legal heirs and descendants may be entitled to inherit a portion of the estate, depending on where the decent died. For example, in New York, if an individual dies intestate, their spouse and children will inherit the estate. Children born outside of marriage will automatically inherit from their mother, but they can only inherit from their father if paternity has been legally established.

The pretermitted child. Even when an individual executes a valid will, or a will substitute (testate) specifically naming their children, the “pretermitted child” statutes in some jurisdictions may dictate that a newly discovered biological child will receive a portion of the estate. These statutes are designed to ensure that children born after a will’s execution aren’t inadvertently disinherited.

For example:

• In Massachusetts, if a child is born or adopted after a will is signed and isn’t mentioned in the will, they may be considered a “pretermitted child.” Unless the child has received provisions outside the will, the omission was intentional or specific conditions with the surviving parent apply, the pretermitted child’s share of the estate will be determined either according to intestacy laws or as an equal share with the other children, depending on whether there were other children at the time the will was executed.²

• In Connecticut, if a child is born or adopted after the execution of a will and isn’t mentioned in the will, the child may be entitled to a share of the estate unless the omission was intentional or the child was provided for outside the will. The child’s share is typically determined either according to the laws of intestacy or by an equal share with other children, depending on the circumstances.³

• In New York, if a child is born after a will is executed and isn’t provided for in the will, they may be entitled to a share of the testator’s estate. If the testator had other children when the will was made, the after-born child can receive a share equal to what they would have received if included with the other children, unless the will specifies an intention to exclude after-born children.⁴

Parentage laws. In most states, children born outside of marriage, including those born before a will is executed, have the right to claim a share of a deceased parent’s estate under statutory inheritance laws. These rights are determined through parentage laws in the respective jurisdiction where the parent died, establishing whether the child is legally recognized as a descendant.

For example, a biological child may need to undergo legal proceedings to prove parentage if their relationship to the decedent was previously unknown or not acknowledged in estate-planning documents. This process can be more complex when the will doesn’t explicitly disinherit unknown biological children.

The use of DNA evidence in heirship claims. Genetic testing can provide clear evidence of biological relationships, but its use in determining heirship isn’t always straightforward. Courts generally prioritize the legal status of a relationship over genetic evidence alone. For instance, a biological child who hasn’t been legally recognized may face challenges when asserting inheritance rights without additional legal proof of parentage.

Courts tend to rely on formal recognition of familial relationships—such as legal adoption or acknowledgment by the parent—to determine heirship. As such, even if DNA evidence confirms a biological relationship, it may not be sufficient to establish inheritance rights without legal validation, such as a court order or an acknowledgment of parentage.

Heightened risks associated with class gifts. Gifts made to larger groups of people, such as “nieces and nephews” or “grandchildren,” can pose additional risks in estate planning. These class gifts may unintentionally include unknown biological relatives, especially if the terms used in the will aren’t clearly defined.

When a gift is designated for a class of individuals, such as “my grandchildren,” the class remains open until the testator’s death. This means that new members can be added to the class, or existing members can be removed, depending on circumstances. As a result, previously unknown biological relatives could potentially qualify as part of the class if they can prove their relatedness. This may or may not be the intention of the testator. 

The intestacy statute will guide the interpretation if a will includes a class gift to “my grandchildren” without further clarification. Adopted grandchildren would generally be included in the class gift, just like biological grandchildren, unless the will explicitly excludes them. Similarly, grandchildren born out of wedlock would be included, assuming legal recognition or acknowledgment of paternity (if applicable).

Estate tax apportionment. In addition to disputes over inheritance rights, the allocation of estate taxes can become contentious, particularly when the definitions and intentions behind the apportionment are unclear. This issue is especially significant given the federal estate tax rate of 40%.

There are two common methods for apportioning estate taxes: proportional apportionment and residuary apportionment. In the proportional appointment method, each beneficiary pays a share of the estate tax based on the proportion of the estate they receive. This ensures that each heir’s tax burden is directly tied to the value of their inheritance. In the residuary apportionment method, estate taxes are paid from the residuary estate—the portion remaining after specific bequests and expenses have been addressed. This means that taxes are paid out of the remainder of the estate after all designated gifts are made.

When estate taxes are paid “off the top,” or from the total value of the estate before individual bequests are distributed, questions may arise about whether newly discovered beneficiaries, such as those identified through genetic testing, should bear their share of the tax burden. The discovery of new relatives can impact not only the tax distribution but also the overall share each beneficiary receives, potentially altering the estate’s distribution in a way that may not align with the original intent. Estate planners must account for such contingencies to ensure that the tax apportionment reflects the decedent’s wishes, especially as family structures evolve.

Strategies for Attorneys

To address the challenges posed by unexpected heirs, estate-planning attorneys should consider several strategies:

Drafting clear definitions. Estate planners should use precise language in wills and trusts to avoid ambiguity and limit potential disputes. For instance, specifying the testator’s intent to limit a class of persons to certain named individuals can close the class and prevent future claims from unknown relatives.

Incorporating contingencies. Given the rise of genetic testing, estate planners may consider incorporating contingencies for unexpected discoveries. Provisions can clarify how such discoveries should be handled, preserving the testator’s intent. In terrorem clauses may serve as a deterrent, reducing the likelihood of disputes arising from newly discovered relatives or other challenges. When permitted under state law, these clauses disinherit any beneficiary who contests the validity of the will or trust, ensuring the estate plan remains intact.

Advising clients. Estate planners should educate clients about the implications of genetic testing and the potential for unexpected discoveries. Although such a conversation may be uncomfortable, by raising awareness about the possibility of unknown children or other unknown relatives, planners can help clients make informed decisions about their estate plans, particularly if there’s a chance of an unexpected relative.

Estate planners should discuss strategies to manage these risks effectively, including: (1) encouraging regular reviews and updates of estate plans to reflect new family dynamics or newly received information; (2) discussing the use of specific language to define terms like “children” and “descendants;” (3) addressing the possibility of future genetic discoveries and how they should be handled; and (4) if applicable, considering the disposition of genetic materials such as frozen sperm, eggs or embryos and specifying who will have control over these assets and under what circumstances they may be used, particularly to clarify inheritance rights for children conceived posthumously.

Balancing fairness and family dynamics. While legal tools like in terrorem clauses can help deter disputes, estate planners must also consider the emotional impact of their recommendations. Clients may wish to provide for newly discovered relatives out of a sense of moral obligation or to foster familial harmony. However, these decisions must be balanced with the practicalities of preserving the estate plan and preventing conflicts among beneficiaries.

Consider a couple who has built a substantial estate. Later in life, the husband discovers he has a biological daughter from a previous relationship. This daughter, who was adopted by another family, reconnects with her biological father. The couple decides to provide for this daughter in their estate plan but must navigate the complexities of inheritance distribution, particularly in relation to how she’ll proportionately inherit compared to their other children.

The estate planner advises the husband to leave a specific amount for the daughter, less than what’s provided for his known children, and to include an in terrorem clause in his revocable trust. The clause would state that any beneficiary, or that beneficiary’s descendants, who contests the husband’s estate plan would forfeit their inheritance. While the enforcement of in terrorem clauses isn’t always permitted under state law, its inclusion may deter the newly discovered daughter from claiming that she’s entitled to an equal share of the estate, thus preserving the husband’s original intentions.

Planning in a Changing World

As DNA testing services continue to improve and their use continues to proliferate in society, these services not only reshape our understanding of ancestry but also introduce new legal complexities that could significantly impact the future of estate planning. 

The revelation of unknown relatives, whether through genetic testing or other means, highlights the limitations of traditional estate-planning frameworks, which were often based on static, biological or marital definitions of family. This emerging issue will likely become more pronounced as more individuals turn to DNA testing, raising important legal and financial considerations.

For estate-planning professionals, this shift calls for greater attention to how terms like “children” and “descendants” are defined in wills and trusts. It also underscores the importance of considering contingencies for the potential discovery of new heirs and ensuring that estate plans remain fluid and adaptable to these unexpected developments. 

Looking ahead, there’s likely to be growing interest in legal precedents surrounding DNA-based inheritance claims as courts continue to grapple with the legal recognition of genetic relationships versus those established by law, particularly when a relative was previously unknown. 

Estate planners and legal professionals will need to remain vigilant about these emerging issues and work proactively with clients to safeguard their wishes. The future of estate planning, it seems, will increasingly require not just legal expertise but also a forward-thinking approach to the complexities of genetic science and the ever-expanding definitions of “family” and how they’re integrated into the legal landscape. 

Endnotes

1. “Direct-to-Consumer Genetic Testing Market,” Vision Research Reports (March 2024), www.visionresearchreports.com/direct-to-consumer-genetic-testing-market/40299.

2. Mass. Gen. Laws ch. 190B, Section 2-302 (West 2024).

3. Conn. Gen. Stat. Section 45a-257 (West 2024).

4. E.P.T.L. Section 4-1.3 (McKinney 2024).