- To avoid paying inheritance taxes for a bequest to a non-lineal descendant, a nephew was adopted by his aunt.
- Even though he was adopted by his aunt, the son's biological mother was still able to include an inheritance for her son.
The second point is for a little more on the advanced side. One of the trade-offs of getting adopted is that once you are adopted, you are normally cut-off from adopting from your biological side. So, if your rich aunt adopts you, and then the next month your mother wins the lottery and dies from a heart attack, you don't get to share in the lottery winnings as you are no longer your mother's child. (You are your aunt's child, essentially, and you can only have one set of parents. Mom becomes your aunt and your aunt becomes your mom.)
However, the Iowa Supreme Court made the notation that the biological parent in this case specifically named the (adopted) child and thus that specific naming of the child was enough to counter the change in status from the adoption. For example, if the biological parent had said "I leave my millions equally to my children", then the adopted son would not have received the inheritance from biological mom. But, since biological parent said "I leave my estate to my wonderful son Matthew" the specific naming of that biological child was enough to "override" the disinheritance by the adoption. The court didn't mention anything about it, but I would assume that the inheritance from the biological parent was subject to inheritance tax as technically her biological son was now her nephew. You can't win 'em all, I guess.
Moral of the story: You can have your cake and eat it, too.