The act of disinheriting a child must be thorough.
It is not uncommon for family relationships to undergo strain.
Family members may become estranged and not see one another for decades.
Other families simply suffer from diminished trust.
Some children grow up.
Other children … just continue to have more birthdays.
In short, not all children become mature and responsible adults.
According to a recent Westfair Online article titled “Disinheriting a child,” these circumstances may require unpleasant estate planning actions.
Although it may not be your first choice, it may be best to consider disinheriting a child.
Taking this step may trigger backlash from your other offspring.
After all, when it becomes “relevant” you will be gone and they will be around for the fallout.
As such, you should prepare yourself and your heirs emotionally and legally for a challenge to your last will and testament and, potentially, an ensuing estate battle.
What should you specifically address and consider when disinheriting a child?
A last will and testament must be filed and processed through the probate courts when you die.
When this happens, your last will and testament becomes a “public” legal document.
If you use a last will when disinheriting a child, this individual will receive a copy of your last will and contest your wishes.
If you die “intestate” (i.e., without a last will and testament), you will be unable to prevent the estranged child from receiving a share of your inheritance.
It is also important to remember certain assets pass through beneficiary designations (think life insurance and retirement funds) rather than through your last will and testament.
In addition to disinheriting a child from your last will, you should remove the name of that child from any beneficiary designations.
If you fail to do so, this child will inherit such assets directly when you die.
Using a revocable trust.
Trusts are useful estate planning tools if you desire your estate to bypass probate.
With a revocable living trust (RLT), you can control assets while you are alive.
Once you die, the RLT rather than the probate court governs the management and distribution of assets for heirs.
If state law permits and you specify in the terms of the RLT, no one outside of the RLT beneficiaries and trustees needs to be notified of the existence and terms of the trust.
This privacy can be especially useful when disinheriting a child.
Although a RLT may still be contested, challenging a RLT is far more difficult.
One strategy used by some to avoid probate is to change bank, investment, and real estate property ownership to joint ownership.
Although this may seem a simple solution, it can have unintended consequences.
If your new joint owner has money issues, you may open your assets up to his or her creditors.
Similarly, divorce can make these assets available to a soon-to-be ex-spouse.
If the joint owner is responsible and simply dies before you do, the former protection from probate is useless.
The asset will revert to your probate estate.
A RLT would be a more reliable solution.
Adding a no-contest clause.
A no-contest clause is also known as an “in terrorem” clause.
Relying solely on this clause when disinheriting a child is unwise.
Although the clause may stipulate a forfeiture of any distribution to the individual if the will contest is unsuccessful, your child may build a case and win.
Working with an experienced estate planning attorney is important in all estates planning, but doing so is vital when disinheriting a child.
Reference: Westfair Online (Jan. 26, 2021) “Disinheriting a child”