There is no one-size-fits-all formula for families and, as such, there is no one-size version of estate planning either. Every situation is different and requires different considerations. One situation we see on occasion involves an individual or couple who wish to disinherit someone from their estate. This is a pretty serious decision and should not be made lightly, especially since it can have additional ramifications. First, we recommend attempting to fix or resolve the issues that are causing the client to wish to disinherit. However, sometimes there is no way to resolve the matter and they are left with disinheriting as a last resort.
Generally, disinheriting is done for one of two reasons: the individuals is not responsible with money nor trustworthy and, as a last resort, the client feels they must completely cut them out of the estate; the other reason is generally based in years of conflict, argument, disagreement and anger to where the client wants them to have no part of their estate. Whatever the reason, there are several things to keep in mind and rules to follow when disinheriting an individual from your estate.
First, if you are disinheriting someone because you do not trust them with the financial responsibility of inheriting, there are better ways. With an MH trust, we can work in provisions that help the beneficiary to learn and prove financial responsibility. You can set up your distributions based on certain qualifications or achievements. For example, you could say that they will receive $5,000 after they have held a steady job for 2 years and another $5,000 upon finishing their Bachelors Degree. You can also allocate money for very specific purposes such as college, purchasing a home, or investments. You could require that they receive some training in financial responsibility and investment before the funds are given to them. There are a vast number of possibilities and, unlike disinheriting the individual, this helps teach them responsibility and rewards them for positive behavior and achievements.
If there are serious conflicts between you and the individual you wish to disinherit that can not be resolved, it is important to make sure that you create a living trust so that they cannot contest the Will in court and receive their portion of your estate. It is important to clearly list the person that you are disinheriting. Although not required, we highly recommend that you write a reason regarding your actions. This will help you make the decision a thought out and well determined one and avoid rushing to harsh actions. This will also help the disinherited individual to understand your reasons and to cope with the action.
While having to disinherit someone is often a difficult and painful decision, there are times and situations when it becomes a necessity. Ensure that it is done properly by setting up a living trust with Morris Hall. To discuss your situation and planning needs with an attorney, schedule a free consultation by calling 888.222.1328 today!
About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, powers of attorney, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.