The Alternatives to Disinheriting a Child

The decision to disinherit a child must be a painful decision–oftentimes, a relationship has been broken, maybe beyond the point of being salvaged. These decisions are very personal, and I’ve gotten some negative reactions when I’ve asked folks about those decisions (although I promise I wouldn’t ask if it weren’t important). If you’re preparing an estate plan and considering disinheriting a child, here are some things to consider:

Why Might A Parent Disinherit a Child?

There are four main reasons why parents might disinherit a child:

  • Estrangement. Whether the relationship has soured or just disappeared, the parents and children just don’t get along any more.
  • Unequal financial success. Some children earn more than others, and parents may want to apportion more of the estate to the less financially successful child.
  • Disability. Some children may have physical or mental disabilities that keep them from accumulating much wealth, force them on to government assistance, and may make money management difficult for them. Parents may worry that giving the child something in the estate might disqualify them for benefits (and, if distributions are done incorrectly, this is a reasonable fear).
  • Debt or other financial difficulties. Some children rack up large amounts of debt, or may have substance abuse or other problems that keep them from managing money effectively. Parents may worry that leaving money to a child in deep debt or with substance abuse problems will just be feeding a bad situation (this is also a reasonable fear).

Should You Completely Omit the Estranged Child?

If your relationship with a child has gone bad or has seemingly ended, it might be tempting to omit that child entirely. However, there is a risk to complete omission: the disinherited child might contest your will. A successful will contest generally invalidates the will, which means that your property would pass as if you never had a will in place at all. As we discussed in a previous article on intestacy, your surviving spouse and children are going to be the first in line to inherit if you die without a valid will in place. So, rather than get nothing under the will, a disinherited child might attack the will and try to get something in intestacy.

Sometimes people in this situation will suggest the use of an in terrorem clause, which provides that a person contesting a will forfeits whatever he or she would take under the will if the will is held to be valid. These clauses are allowed in Missouri, although they’re not favored by the courts.

However, in terrorem clauses are useless if you’re disinheriting a child. Why? Because the disinherited child has nothing to lose–he or she gets nothing under the will, and the clause says he or she gets nothing if the will contest fails. So, 0 – 0 = 0. On the other hand, if a child got a small, but still significant amount under the will, that child has a decision to make: attack the will and try to get more (and risk losing what the will provided), or take the amount under the will.

One last note on disinheriting an estranged child: bad relationships can improve, and sometimes things may get patched up (this is the result I like). If that happens, and your relationship with your child improves, don’t forget to update your estate plan accordingly!

Handling children with different financial situations

I’ve written about this before, but communication is key here. If you’re going to completely disinherit a child (or reduce his or her share relative to the other kids) because that child is in a better financial position, do not let it be a surprise for them after your death! For a lot of people, being omitted from a will or getting a smaller share is going to sound a lot like, “I don’t love you,” or “I loved your siblings a lot more than you.” Of course, if that happens, you won’t be around to clarify it.

Also, as the estateplanning.com article I linked to above pointed out, you might not know all the details surrounding a child’s circumstances. If you’re a parent, you know that you might not want your children to know all of your financial details–it can be the same with children. A child might be doing his or her best to look successful, and at the same time, struggling for some reason. Make sure that you don’t make any bad assumptions about your children’s relative financial situations when you make a decision like this.

What about a disabled child or a child with debt troubles?

Children with disabilities who depend on government benefits are probably better off if you don’t give them anything outright. Generally, they would be ineligible for benefits once they received property from you–until it was used up, and then they have to go back to benefits. If you have a child in this situation, you should consider establishing a special needs trust for them as part of your estate plan.

If you have children with debt troubles, marital problems, or substance abuse issues, you may want to avoid leaving them anything outright as well. Instead, you may want to provide for them inside of a trust, where the property can be protected and managed for their benefit. In most cases, I suspect this would be a preferable alternative to disinheritance.

In the end, the decision to disinherit a child is a deeply personal one (although now you may understand why I ask about it!). Before taking such a drastic step, I encourage you to talk with your estate planning attorney to make sure the disinheritance is really the best course for you to take.

Photo credit: Brandon Morgan, via unsplash.com

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