Adoption
When Child Welfare IS NOT Involved
Adoption is a legal process that creates a parent-child relationship between people who are not parent and child by birth. Once a child is adopted, that child has the same legal rights as a child born to the family, and the adoptive parent has the same legal duties as a birthparent to care for and raise the child. The relationship changes from grandparent/grandchild (or aunt/niece, cousin/cousin, etc.) to parent/child. Find more information about adoption and the court process.
If you adopt your relative, you are eligible for the Federal Adoption Tax Credit for each child adopted, which reduces the federal income tax you must pay. It is a credit rather than a deduction, meaning it is a dollar-for-dollar reduction of your total federal tax liability. This amount varies by year, but it is usually around $15,000. Find more information here. Since the child was not adopted from foster care, you must show legal and other adoption expenses and can only deduct actual expenses up to the full deduction amount.
Advantages
Disadvantages
- Adoption permanently terminates the child’s parent’s rights and is not revokable. This can be both an advantage and a disadvantage, but you may want the security of knowing that no one can take the child from you.
- An ongoing relationship can continue between the child and the birthparent, but you get to define the nature of this relationship until the child is old enough to decide for themself.
- The child can inherit from you if you die without a will and receive social security survivor’s benefits.
- Adoption permanently terminates the child’s parent’s rights and is not revokable. This can be both an advantage and a disadvantage, but you may not want to change the legal relationship. Instead, you want to remain the grandparent or aunt.
- Introducing the idea of adoption may make it harder to work out a custody arrangement between you and the parents because it sets up a you vs. them relationship from the beginning.
- Adoption usually requires that you hire an attorney. It can be costly, especially if the parents contest the adoption. The Federal Adoption Tax Credit can offset this cost.
