A look at how to address pitfalls in Texas’ process
By Eric Bean
A billionaire with no biological children takes in an orphan and treats her like his own daughter. The precocious orphan with a penchant for catchy songs loves the old man as a father. But because of some mischief carried out by the orphanage’s matron, her felonious brother, and his gold-digging girlfriend, the billionaire never signs adoption papers. Sadly, after foiling the matron’s plot to collect an award and return the orphan to a life of servitude, the billionaire dies intestate.
Based on a referral from the billionaire’s assistant, you help the orphan file an application to declare heirship, asking the court to declare she is the billionaire’s adopted daughter and only heir. But the billionaire’s long-lost brother contests the application, claiming he is the only heir. Is the orphan doomed to a hard-knock life, or will she be living on Easy Street? As always in this line of work, the answer is … maybe.
Brief History of Equitable Adoption
Adoption was not recognized at common law; it is a “creature of statute.”1 Despite the existence of a statutory scheme for adoption,2 in the face of “extraordinarily persuasive” factual situations, courts developed a doctrine known alternatively as equitable adoption, adoption by estoppel, virtual adoption, or de facto adoption.3 Texas courts began recognizing equitable adoption as early as 1934.4
Equitable adoption presents challenges not only to intestate estates, as in the orphan’s case, but also to testate estates that provide for class gifts to the testator’s “children” without specifically identifying the children.5
Theories of Recovery
Courts generally apply one or a combination of two theories of recovery in equitable-adoption cases: an estoppel theory and a contract theory.6
The contract theory, based on specific performance, emphasizes the existence of an unrecorded instrument to adopt between the adoptive child’s natural and foster parents.7 A significant problem with the contract theory is identifying the parties to the contract.8 At the time of an alleged equitable adoption, the child is generally too young to protect his or her own rights, know of the existence of a contract, or understand its import.9 Someone in loco parentis must act on the child’s behalf.10 This approach relegates the child to third-party-beneficiary status, despite the child providing at least half of the consideration.11
Under an estoppel theory, equity regards as done what ought to have been done.12 This theory emphasizes the benefits and privileges the foster parents received by the child’s performance and the representation of an adopted status made by the foster parents to the child.13 Because of its emphasis on the conduct of the child and the adoptive parents, the estoppel theory is, for many, superior to the contract theory.14
Texas has developed a hybrid rule combining the two theories, predicating relief on the broad concept of estoppel but attaching to that relief the same prerequisites existing in contract-theory jurisdictions.15
Equitable Adoption in Texas
In Texas, equitable adoption estops those claiming under the deceased parent from denying the equitably adopted child’s inheritance rights on the ground that the child was not legally adopted or did not occupy the status of an adopted child.16 The estoppel applies to collateral kindred in privity with the adoptive parent.17 To establish equitable adoption, the child must prove (1) an agreement by the adoptive parent to adopt the child and (2) performance by the child.18
The performance element is relatively straightforward: The child must confer affection and benefits upon the adopting parent.19 Similar to common law marriage, the adopting parent and the adoptive child must live in a relationship consistent with that of a natural parent and natural child.20 Because the performance element is simple in comparison to the agreement element, most cases will hinge on whether there exists a binding agreement.
The agreement can be established by direct or circumstantial evidence.21 The child need only establish an agreement by a preponderance of the evidence, but the proof should nevertheless be “clear, unequivocal, and convincing.”22 In fact, “[S]tatements or conduct claimed to establish a contract to adopt must be unequivocally referable to such an agreement.”23 Whatever the stated standard of proof, courts can and often do apply it with varying degrees of strictness depending on whether or not they want to find a contract.24
To establish the agreement to adopt, the child must prove that the adoptive parent: (1) executed a statutory instrument of adoption in the office of the county clerk; (2) attempted to complete the statutory adoption but failed to do so because of some defect in the instrument of adoption or in its execution or acknowledgment; or (3) agreed with the child, the child’s parents, or some other person in loco parentis that he or she would adopt the child.25 The agreement can be oral.26
The agreement “must consist of a present promise to adopt, as opposed to a mere desire or intention to adopt in the future.”27 The element focuses on the actions of the potential parent and not on the action of the child seeking to prove adoption.28 The child does not have to prove knowledge of or reliance on the agreement.29
Mere acts of human kindness referable to an undertaking to rear and educate a helpless child do not prove an agreement to adopt.30 Supporting the child and referring to the child as “my child” is not sufficient.31 Nor is in loco parentis the equivalent of an adoption.32 In short, proof of a familial relationship alone will not suffice; rather, all the evidence must point to an understanding between the alleged adopter and the biological parents or their counterparts.33
In combination, the following factors are indicative of an agreement to adopt: (1) the child assumed the adoptive parent’s surname; (2) the child was referred to as the foster parent’s child; (3) the child addressed the foster parent as “mommy” or “daddy”;34 (4) use by the child of the foster parent’s name on school records or other similar records;35 (5) the foster parent’s identifying the child as a dependent on tax returns; (6) the foster parent’s designation of the child as a beneficiary on non-probate assets;36 and (7) other similar statements or conduct by the adoptive parent from which an agreement may be inferred.37
Relinquishment as an Element or Evidence of an Agreement
Missing from the factors listed above and from most discussions in Texas cases is the surrender of the child into the hands of the adoptive parent and the relinquishment of parental rights by the genetic parents. Although not explicitly an element of equitable adoption, the authorities generally agree that at least one parent or someone acting in loco parentis must relinquish the child into the custody of the adoptive parent:
The natural parent (or those standing in loco parentis) are obligated, under the terms of the usual adoption contract, to surrender their custody of and control over the child to the adopting parent. It is clear that both of these obligations must be fulfilled if equity is to enforce the contract against the adopting parent’s estate.38
This relinquishment or surrender principle finds support in Texas law. First, implicit in the agreement-to-adopt element is the relinquishment of custody by the genetic parent or a person acting for the child into the hands of the foster parent.39
Second, Texas adoption statutes emphasize the necessity for termination of at least one of the genetic parent’s parental rights.40 As the Texas Supreme Court has noted, “a valid adoption must be preceded by either a judicial termination of the rights of the natural parents, or an irrevocable relinquishment of parental rights by affidavit[.]”41 It follows that even an equitable adoption must be preceded by the termination of the rights of at least one of the natural parents. At the very least, there must be some evidence that one of the parents gave the child to the adoptive parent with the understanding that the transfer would be permanent.
Third, someone must consent to the adoption on behalf of the child. “Consent is a requirement . . . for adoption under [F]amily [C]ode section 162.001 and also for adoption by estoppel.”42 Consent to an adoption by a genetic parent or someone acting in loco parentis implies a surrender of parental rights and a surrender of the child into the custody of the adoptive parents.
Finally, out-of-state courts that have considered the relinquishment issue describe the typical scenario in which natural parents give up their child to foster parents who in turn agree to adopt the child. These courts tend to agree that relinquishment is an element of equitable adoption.43 For instance, the Supreme Court of Appeals of West Virginia has identified a number of indicia of equitable adoption, one of which includes “the surrender of ties by the natural parent.”44
Similarly, the Georgia Supreme Court found no evidence of a contract or agreement to adopt due to a lack of surrender and relinquishment by the genetic parents:
Statements by the deceased showing affection for the plaintiff, and a fatherly attitude toward the plaintiff, accompanied by statements by the deceased that the plaintiff was his adopted daughter, considered in their entirety, are wholly insufficient to show that [the genetic parents] surrendered the plaintiff to [the potential parent] pursuant to an oral contract between the parties that the parents would relinquish all parental rights, and that the defendant [potential parent] would adopt the plaintiff in the manner provided by law.45
The genetic parents’ relinquishment of parental rights should accompany the potential parent’s promise to adopt. Even if relinquishment is not an explicit element of equitable adoption, evidence of relinquishment (or a lack of it) is probative of the existence or non-existence of the agreement to adopt.
Texas’ approach to equitable adoption is complex, combining aspects of contract and estoppel theories of recovery. The determination of whether a child has been equitably adopted is likewise difficult and fact-intensive. Given the relative simplicity of establishing the performance element, decisions will likely hinge on proving or disproving the existence of an agreement using circumstantial evidence. Even though relinquishment is not explicitly an element of equitable adoption in Texas, it either should be or the evidence of relinquishment should be considered probative of the existence of an agreement.
Don’t wait for tomorrow to address equitable adoption pitfalls in your own forms and in your clients’ estate plans. Educate them about the issues that can arise when they decide to take in a friend or family member’s child. Nudge your clients toward an estate plan that clearly identifies their children. In short, when your client becomes the decedent and the litigators smell a New Deal for Christmas, don’t let your last refrain be “Something Was Missing.” TBJ
ERIC BEAN is an associate of Dinkins Kelly Lenox Lamb & Walker in Houston, where he focuses on estate planning and probate law with an emphasis on trust, estate, and guardianship administration and disputes.