What You Need to Know Before Disinheriting a Family Member

disinheriting a family member
Marla Brill

By Marla Brill | Aug 18th, 2019

Disinheriting a child or other close family member is a difficult decision that’s often driven by profound disagreements, broken relationships, and long-standing conflicts.  Because the wishes of the person leaving behind an estate may not coincide with guidelines set by state law, doing so requires careful planning and guidance from an attorney who specializes in estate planning

The Right to Contest

Spouses usually have some protection under the law so disinheriting one completely may not be possible, according to elderlawanswers.com. Most states have laws that protect a spouse from walking away empty-handed, and some automatically entitle spouses to the portion of an estate. One exception may be when both spouses have a written agreement waiving the right to the other’s estate.  

On the other hand, states generally do not require parents to leave anything to their adult children if they don’t want to. That applies to blended families, which can become embroiled in controversy when a surviving stepparent faces pushback from adult stepchildren bubbling with resentment about not getting what they consider their fair share of the estate. 

It’s safe to say that whoever is being fenced out will be pretty hurt and angry and may try to fight the situation. Children or other relatives can claim that someone exerted “undue influence” over the decision or challenge the deceased person’s mental competence, so simply excluding them from the will may not be enough.  

Heading Off Challenges

Attorneys have a number of recommendations for those considering disinheriting a child or other family member or leaving unequal inheritances. 

Update beneficiary designations. Naming certain individuals as beneficiaries on assets such as Individual Retirement Accounts or 401(k) plans is one easy way to direct who receives assets in an inheritance writes Texas attorney Brad Wiewel on nextavenue.com, a website aimed at baby boomers. Those not named will simply not receive the assets. For brokerage or bank accounts, a POD (payable on death) or TOD (transfer on death) accomplishes the same thing. None of this information is public record, making it a discreet way to divide assets unequally.

Consider a living trust. Wiewel also points out that a living trust may be a better way to disinherit than a will. In most states, only the trust’s beneficiaries may challenge its provisions. And unlike wills, which are often signed when someone is close to death, living trusts are usually established years before a death and may have already been used to open accounts or pay bills. That transactional history makes it more difficult to claim that someone was unduly influenced or incapable of making decisions. 

Have safeguards. Under California law, a direct heir who is left out of a will would be able to claim that he or she was simply forgotten rather than intentionally omitted, according to HMS Law Group in Sacramento, CA. If that claim is successful, the person could be automatically entitled to a share of the estate. One step to prevent that from happening is to add a statement to a will or trust specifically disinheriting the named individual.  A “no contest” clause in a will or trust that automatically disinherits anyone who contests it can also help shield the estate from challenges. Such a clause would make it possible to leave a partial, smaller inheritance to a person as an incentive not to contest the will or trust. 

Step back. If you stand to benefit from disinheriting another family member, it’s best to avoid any appearance that you are trying to influence the decision. “That means no shortcuts,” notes a recent article by attorneys Len Tillem and Rosie McNichol in the Santa Cruz Sentinel. “They (the parents) should see their attorney without you (the child) in the room, the building or even in the parking lot waiting for the car.”

Don’t mess with the deed. Tillem and McNichol also warn that it is almost never advisable for parents to put the name of one child on the deed to their house in order to cordon off that asset from another.  By doing so, they restrict their ability to get a reverse mortgage or take out a home equity loan and open up the possibility of a legal judgment against the home in a lawsuit involving the child whose name is on the deed. 

Disinheriting a family member can trigger brutal family infighting and discord that lasts for many years, so it shouldn’t be done without careful consideration. At the same time parents who don’t see eye-to-eye with their adult children, couples with children from previous marriages, and others have every right to distribute their assets in accordance with their wishes and to exclude those they deem unworthy.

Marla Brill

Marla Brill


Marla Brill has been a personal finance journalist for over 30 years,  writing about money topics for Reuters, The Boston Globe, Financial Advisor Magazine, MarketWatch, PBS’s NextAvenue, and other publications.

 
 
 
 
 
 
 
 

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