Assisted reproduction is fertile ground for financial planning missteps

The rising number of women and couples using assisted reproductive technology, or ART, to start or grow families has created a range of potential blind spots for financial planners. While many questions are legal at their core, advisors are often best positioned to flag issues that may affect a client’s financial security. 

Processing Content

Essentially, modern reproductive technology means that family planning documents are now financial planning documents. Vague, stale or inconsistent instructions can expose clients to litigation. 

But in order to help, advisors first have to be aware the issues exist. I once worked with a woman who was going through a divorce and who only disclosed she had stored frozen embryos after I asked about her three children. As we talked further, she mentioned she no longer wanted to pay the storage fees since she didn’t want more children. 

Naturally, the implications extended beyond who would pay the fees. We needed to determine her ex’s intentions. And, given the Supreme Court overturning Roe v. Wade, we needed to ensure that her state would legally allow the storage of the eggs to lapse. 

READ MORE: Can my client claim frozen embryos as dependents?

Frozen embryos and other stored genetic material

Clients with frozen embryos or other stored genetic material should be aware that reproductive intent can outlast the legal framework supporting it. Some states have modernized parentage rules via the Uniform Parentage Act, but others have not. 

Courts often look at written consent forms and embryo-disposition agreements, but outcomes can and do vary based on the state and the clarity of the documents. In the widely followed dispute between actress Sofia Vergara and her ex-fiancé Nick Loeb over rights to frozen pre-embryos, the existence of signed clinic documents requiring mutual consent became central to blocking unilateral use of embryos after the relationship ended. In New York’s Kass v. Kass, advance written instructions were also treated as highly significant. 

Other cases, including disputes involving divorced spouses who changed their minds after in vitro fertilization, show why vague or incomplete language can turn a very personal decision into years of expensive litigation. The upshot is that clinical paperwork can’t sit in a silo. Embryo-disposition instructions should be reviewed alongside divorce agreements, powers of attorney, trusts and beneficiary designations so an ex-spouse does not retain authority by default.

Advisors should push clients to confirm who controls disposition of any genetic material. It is crucial to understand who is responsible for storage costs; whether future use, destruction or donation has been addressed and whether those terms match the estate plan and divorce documents. 

Advisors should also ensure that documents are reviewed to guard against an ex-spouse retaining authority by default.

READ MORE: How advisors can help clients plan for fertility treatment costs

Sperm donors: A related but different risk

For single women using a licensed sperm bank, the legal path is usually cleaner because the donor is generally not treated as a legal parent. But the risk profile changes when a client uses a known donor outside a clinical setting, even if everyone has the best intentions.

Parentage can also become contested when agreements are missing, are informally drafted or are inconsistent with state law. A sperm donor who was once “just helping out” may seek recognition as a parent. Conversely, a donor may face support claims if the arrangement was not structured properly. 

Advisors can help avoid such scenarios by asking the right questions and making sure donor agreements and parentage documents clearly articulate a client’s wishes.

READ MORE: Single woman seeks wealth management: How to advise independent female clients

Next steps and 3 questions to limit financial, legal exposure

Advisors do not need to become reproductive law experts, but they do need to know how and when family-building decisions can impact a woman’s financial and legal exposure. 

To that end, advisors should ask clients specific questions, including about:

Whether they have frozen embryos, eggs or sperm in storage;Whether a former spouse, partner or donor has any legal or practical role or ownership; andWhether clinic forms match estate documents and whether the client intends future or posthumously conceived children to be in the estate.

From there, the advisor’s role is as a coordinator. Bring in fertility counsel, estate counsel and family law counsel. Update trusts, fiduciary powers, guardianship provisions and beneficiary designations so they reflect the client’s family plan. For clients with wealth-transfer or charitable goals, tax strategies such as charitable trusts or asset-location decisions should come after parentage and embryo-control questions are settled.

As family structures evolve, the most valuable advisor may be the one who knows enough to ask: Who has control, who is protected, and do the documents all point to the same answer?

Ultimately, the answers will help secure the client’s financial future.