An estate is a lifetime’s worth of work. This labor of love may include business interests, multiple pieces of real estate and family heirlooms. Once we have gotten our estate in order and are putting together or updating an estate plan, we may find we have concerns about a potential beneficiary. Perhaps we do not want to support a rogue relative or want to ensure our child, but not their spouse, receives the inheritance.
Although possible, it is best to tread carefully when disinheriting an heir.
Why do I need to be careful when disinheriting an heir?
Because that individual could challenge the will. They could claim that you intended to include them within the estate plan and the oversight was accidental. They could argue that someone else pressured you into excluding them from the will and build a challenge based on undue influence.
How can I better ensure my estate is protected?
As discussed in more detail in a previous post, available here, one way to help achieve this goal is to include a disinheritance clause. This is essentially a provision within the will that states the name of the beneficiary you wish to disinherit. This provides evidence of a clear intention to disinherit the heir to help counter any argument that the lack of inclusion was an oversight.
The issue becomes a bit more complicated, but still manageable, with situations like the second example. When looking to include a child but not their spouse, or similar situations, the issue often arises after the heir receives the inheritance. We can gift the inheritance to our child, but if the child puts the inheritance into a joint account, it likely becomes marital property owned by both the child and the spouse you wished to disinherit.
You can avoid this commingling of funds by setting up a trust. A trust is a legal tool that you can draft to manage the inheritance on behalf of your child while helping to better ensure it remains a separate asset, untouchable by the child’s spouse.