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Excluding relatives from your estate plan's distributions

by Legacy Plan | July 1, 2016

Deciding to exclude a child from your estate plan can be a difficult decision, regardless of whether you've made this decision for personal or financial reasons. Once you've elected this choice, you should make sure that your estate plan is carefully constructed in a way that minimizes, to the extent possible, the chances that the child you've disinherited can go to court and successfully contest your plan. There are various pieces of information that should be included in your plan, and others excluded, in order to give your plan the best protection possible against your disinherited child.

Estate plans and estate planning goals are as unique as the people who make them. The same is true of family dynamics. If your family circumstances are such that you are considering leaving a child nothing from your estate, you generally can do that, but there are several things you should keep in mind as you go forward with your plan.

There are lots of different reasons you might choose to leave a child nothing. Most people associate this decision with a relationship that has become extremely distant or hostile. This is a very common reason for leaving a child nothing, but there are others. Perhaps your child has become wealthy, and you wish to leave your assets to your less-fortunate loved ones. Also, you may have given special assistance to one child in the form of financial gifts during your lifetime, and therefore feel that you have already “provided for” that child outside your estate. Whether your reasons are financial or personal, it is important to avoid including excessive explanations within your plan (especially personal matters) that would only serve to anger or offend your child, because that might further motivate him/her to launch a legal challenge to your plan.

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If you plan to disinherit a child, it is important that you include those wishes expressly within your estate planning documents. You may choose to leave a disinherited child some nominal amount, such as $1, if you want, but this is not necessary. However, attempting to disinherit a child by simply not mentioning him/her at all can be problematic. Your disinherited child could, after you've died, go to court and claim that he/she was “pretermitted,” meaning that your failure to leave a distribution was the result of a mere oversight or mistake on your part. If successful, that child may be entitled to take a portion of your estate equivalent to what he/she would've gotten under your state's intestacy laws. (In other words, his/her inheritance would be the same as if you'd died with no plan in place at all.)

Keep in mind that you can disinherit in most, but not all, situations. Generally, the most likely circumstance in which the law bars you from disinheriting a child is if an existing court order (most likely as part of your divorce from the child's other parent) says that you must provide for that child in your estate plan. Just like how state statutes governing a spouse's right to inherit from his/her spouse's estate plan generally can “trump” a plan that leaves that spouse nothing, a court order that requires you to provide in certain ways for a child generally can override an estate plan that runs contrary to that order's demands.

Additionally, once you've decided to disinherit a child, be aware that no plan is 100% immune to a legal challenge. Almost anyone can go to the courthouse and file a lawsuit to contest almost anything in which he/she has a personal interest. Your estate planning attorney can give you guidance on ways to structure your plan to minimize the potential that anyone could initiate a successful challenge to your plan.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

Phone - 844.445.3422
Email - info@legacyassuranceplan.com
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