As promised, here is Part Two of the article about disinheriting someone from your will. The following details six possible reasons you would want to disinherit a family member. Read on ….
“Six reasons to disinherit a family member:
1. Divorce and second marriages
Why? A change in marital status should prompt you to look over your estate documents. It’s important to update your will after any divorce or remarriage; particularly if you have children from your prior relationship. Your new spouse will have statutory spousal inheritance rights, and depending on the state in which you are married, he or she might be entitled to at least half of your estate.
If you have divorced, not updating your estate plan could mean your ex-spouse could still inherit directly from the will or as a designated beneficiary on one of your investment or retirement accounts.
How? If you want to leave an equal share to all your children, it might mean your current spouse would receive less than what they are legally entitled to. This is a circumstance where you must put this in writing and get your spouse’s consent. This can be achieved with a prenuptial agreement, postnuptial agreement or a separate legal document.
2. Troubled offspring
A parent can disinherit a adult child for just about any reason or even for no reason at all.
Why? Sometimes, parents don’t have a good relationship with a child. That can be enough. However, one of the most common reasons for disinheriting a child is when the child is erratic or has some specific problems they are dealing with. These could include addictions to alcohol or drugs. In these circumstances, parents may realize that any money, assets, or property left to the child may contribute to or exacerbate the problem.
How? Simply leaving the name of your child out of your will is not enough to guarantee that he or she doesn’t receive part of your estate. If you want to disinherit an adult child, you must include this explicit information in your will, making it clearly understood that the omission is intentional and not an oversight. Otherwise, a court might assume the exclusion in estate documents was unintentional and award an equal share to the adult child not named.
3. Estrangement
Why? If you’re estranged from a family member, it might make sense to disinherit them. Estrangement can happen for many reasons and the time apart may lead you to conclude you no longer want them to benefit from your estate. If you are estranged from an adult child or other potential heirs, you have to be clear. Cowan suggests consulting an estate planning professional to make sure your plans to exclude an heir are carried out properly.
How? Leaving an adult child out of your will alone is not enough to legally disinherit them. Likewise, if the estrangement arises after you draft your will, you can’t just cross out their name to keep them from inheriting. You’d have to add a codicil or draft an entirely new will to ensure that your wishes are upheld. Using a properly drafted disinheritance clause, according to Cowen, can make sure your final wishes are enforced.
4. Child or grandchild with disabilities who is receiving benefits
Why? There are situations were cutting someone out of your will is the best decision for your heir. If you have a child or grandchild that has disabilities it may make sense to legally disinherit them. The reason for this is benign; the income from your estate may disqualify them from accessing any government assistance they would otherwise be entitled to receive.
Most federal, state or local disability benefits include guidelines regarding the amount of money a recipient can earn or type of property a person can own without having it impact their benefits. If you were to leave an inheritance directly to your child or grandchild, they may lose those benefits.
That doesn’t mean you can’t still help them financially and make sure their needs are met. Cowan says the use of a special needs trust or supplemental needs trust would allow you to set aside money for their enjoyment and care without upending their eligibility for government programs and assistance.
The trust is irrevocable and is managed by a trustee for the benefit of your heir. By not owning the assets, the trust beneficiary preserves your child/grandchild’s eligibility for need-based government assistance programs. It is the best way to ensure your loved one’s financial needs will be met, even after you are no longer able to care for them.
How? The best option here is the disinheritance clause. Because you can still pass assets to your child/grandchild through a supplemental needs trust and any monetary bequest could disrupt their care plan.
5. Previous support, gifts already given or no financial need
Why? This is another situation where a disinheritance is not an expression of rejection. You may have already given your heirs their share of your estate in a lump sum, or exhausted their share over the year by providing day-to-day support or money for a down payment or to retire student loans.
You may have more than one child with vastly different financial resources. Cowan told me that many parents are reluctant to deviate from leaving equal shares to their children even though some children would benefit more from the bequest.
How? Either a disinheritance clause or no-contest clause would suffice. In fact, Cowan said the property that causes the most disputes “is often of little value” in a monetary sense. Property with sentimental value, such as your grandmother’s teapot or a cherished holiday decoration, can stir up the biggest problems. She offers a simple solution — to use specific bequests to distribute those heirlooms.
6. Leaving your estate to charity
Why? You’ve decided to leave all or the majority of your estate to a charitable cause. There can be a variety of reasons for this, including one of the five listed above. Regardless of the reason, you need to be explicit about your wishes to leave your estate to a charity and not any of your heirs.
If you have already designated other beneficiaries to receive any portion of your estate, you will need to disinherit them or revoke your existing will so you can designate the charity of your choice. How? First you must determine your personal and financial goals in making a charitable gift so as to determine the best gifting strategy.
These are three ways to pass assets to a charity:
· Will or trust. If you want to leave the charity property, be very clear about the name of the charity and include its taxpayer identification number (TIN). This will avoid a mix-up as many charities can have similar names. TIN numbers are usually available on their website.
· Designate it as a beneficiary. A charity or nonprofit can be the beneficiary on your investment accounts, or life insurance policies.
· Donor advised fund (DAF). You can contribute cash, securities, real estate or other assets to a DAF. A huge plus to tax planning is that the contributions are considered a gift to charity for tax purposes.
Should you tell someone they are disinherited?
Making those who are disinherited aware of the situation can make things easier after you pass. Bad news is never truly welcome, but forewarning can be constructive for the rest of your family. Some people choose to include a letter of disinheritance to explain their reasons for excluding someone from their will. This is another tactic to make circumstances clear and avoid.”
Between last week’s post and this one, there is a lot of information to digest about disinheriting people from your will. If this is something you’re considering, by all means, give me a call. We can discuss the pros and cons and ensure your will is exactly what you want. My goal is always to help my clients protect their hard-earned assets and loved ones with a will (and trust when appropriate) that will be legally acceptable, clear, not open to interpretation, and most importantly, meet your needs. Call me at 513-399-7526 or visit my website, www.davidlefton.com, for more information.
Source: Kiplinger 4/12/25 by Donna LeValley