Supreme Court ruling could reshape children’s benefits cases

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As the use of assisted reproductive technologies continues to increase, a recent U.S. Supreme Court ruling has family and estate planning attorneys warning their clients of unforeseen consequences from decades-old federal and state laws governing children’s benefits.

In Astrue v. Capato, the court denied Social Security benefits to children conceived via in vitro fertilization after their father’s death, ruling that state intestacy law controls whether such offspring fall under the Social Security Act’s definition of “child.”

The decision “was a real surprise, and it’s going to cause a ripple effect in the states,” said David Tracy of Naylor, Williams & Tracy in Tulsa, Okla.

The case involved a Social Security benefits application for the children of Robert and Karen Capato. Robert was undergoing treatment for cancer and deposited sperm in a sperm bank, but he passed away soon after.

About 18 months after his death, Karen gave birth to twins conceived with Robert’s sperm via in vitro fertilization.

She sought Social Security benefits for the twins, but the Social Security Administration denied her application, concluding that under Florida state law the children could not inherit from their father because they were born too long after his death.

The 3rd Circuit reversed, holding that state intestacy law need not be considered because the twins were Roberts’ biological children.

But in a unanimous decision, the Supreme Court held that under the language of the Social Security Act, state intestacy law controls.

“Tragic circumstances – Robert Capato’s death before he and his wife could raise a family – gave rise to this case. But the law Congress enacted calls for resolution of Karen Capato’s application for child’s insurance benefits by reference to state intestacy law,” Justice Ruth Bader Ginsburg wrote. “We cannot replace that reference by creating a uniform federal rule the statute’s text scarcely supports.”

Planning won’t help

The ruling creates a problem that even skilled planning can’t solve, attorneys say.

“Even if you have a will that provides that all [biological] children will inherit, it doesn’t do any good when it comes to Social Security benefits, because it’s still based on intestacy law of the particular state where the parent died,” said Misty Watson, an associate in the St. Louis office of Danna McKitrick who focuses her practice on estate planning and administration.

The law in Missouri, Watson said, provides that posthumously conceived biological children inherit from the parent, so the ultimate result of the ruling would have been different if the Capatos had resided there.

The case leaves many questions still unanswered, not only for couples who use assisted reproduction technologies, but also for families who conceive through surrogacy or same-sex couples. Where state law is unclear as to who qualifies as a “child” for inheritance purposes, lawyers may not have the answers.

“I think this may be tricky, for example, for a lesbian client who may carry a child conceived with [her partner’s] donated egg,” Watson said. “Under Missouri law, the person who carries the child to term is considered the mother. [So] this could have further implications down the road.”

Tracy said that lawyers will need to pay careful attention to clients who have used assisted reproduction.

“All estate planning attorneys and family law attorneys are going to have to ask, as part of their initial consultation, whether there has been any assisted reproduction technologies in the family and what the status of that is,” he said. “We need to find out if people have signed contracts with storage facilities [for] embryos or sperm, and what those contracts say. We fail to ask those questions at our own peril.”

Those who have donated eggs or sperm may also need to plan, to make sure they are released from any responsibility for a child under state law “so that the biology doesn’t follow them” for inheritance purposes, Tracy said.

He suggested that state lawmakers need to take a look at intestacy laws.

“Legislatures need to pay attention to what happens to these frozen embryos and frozen sperm,” he said. “It’s something they can’t ignore any longer.”