Are you considering leaving someone out of your will? Perhaps one of your children needs more than others. Or maybe you will that some family members are not deserving of inheritance. There are, however, restrictions on who you can leave out of your will. Here are 7 things you need to know before removing an inheritance.
1. The Spousal Elective Share
Perhaps you want to disinherit your spouse, perhaps because your spouse has his or her own money, or perhaps you are separated but have never completed a divorce. But will the law permit it? You can leave your spouse out of your will, but Colorado law allows your spouse to waive your will and inherit a certain minimum amount.
The amount to which your spouse is entitled depends on the amount of time the two of you have been married. In Colorado, a disinherited spouse can elect to receive 5% of your augmented estate for each year you were married. For instance, if the marriage was more than one year but less than two, the spouse can elect to receive 5%. Your augmented estate includes whatever is left after funeral and administrative expenses, creditor claims, exempt property allowances, and other expenses are paid. The amount an excluded spouse can choose to receive is capped at 50%.
This restriction can be circumvented with a prenuptial agreement in which your spouse agreed to receive some limited amount of assets upon divorce or your death. Be aware, however, that your spouse could also challenge the prenuptial agreement if it failed to comply with certain requirements, such as a failure to fully disclose all assets, or if your spouse can prove you coerced him or her into signing it.
2. Disinheriting Children
There are also limitations on disinheriting children. You can disinherit adult children, something that people often do for one of two reasons. One is because the disinherited child may be more financially secure than others. Another is because the parent and child are estranged or otherwise at odds. Whatever your reason, we strongly recommend that you disinherit children reluctantly. This will be your last interaction with your children and the last thing they remember about you. And because you will no longer be around for them to take their frustration out on, they may direct their ire towards their siblings with litigation. All your children may end up with bitter feelings about your decision.
You cannot, however, disinherit children younger than 18. Disinherited minor children can elect to receive whatever they would have received under state law if you didn’t have a will. Children left out of a will that was written after they were born can make the same election if the will didn’t have any provision for “after-born” children.
[ac_popup imagesrc=”https://www.themckenziefirm.com/wp-content/uploads/2014/04/Denver-Estate-Planning-Attorney.jpg” linkid=”myModal3″]
3. Challenges to a Will
There are a number of well-known instances of disinherited adult children challenging a will’s validity. Some were given token shares while others were totally disinherited, with the bulk of the estate awarded to someone who only entered the testator’s life shortly before death, or who didn’t seem to have the type of relationship with the testator that would typically lead to a large inheritance.
One sensational will contest involved the principal share owner of the Johnson & Johnson corporation, widely thought to be the most expensive will challenge in American history. Six children of Seward Johnson challenged the validity of his will based on lack of mental capacity, among other allegations. Johnson had left more than $400 million to his last wife, Basia Piasecka Johnson, a Polish immigrant originally hired as a cook by Johnson’s second wife. The story was a fascinating tale of incompetent legal maneuvering, conflicting medical accounts, and allegations of undue influence, all combined with public revelations of an extremely weird and dysfunctional family. After three years of litigation, Basia settled with the family paying them about $43 million but keeping $340 million for herself.
Adult children frequently challenge wills from which they have been excluded based on the following causes of action:
- Undue influence
- Lack of testamentary capacity
- Invalidity based on improper execution
Don’t assume that your estate is too small for anyone to bother fighting over. You may not have hundreds of millions of dollars like the Johnsons, but the sting of being left out of even a much smaller estate can lead to feelings of resentment.
4. Undue Influence
Undue influence occurs when a testator’s intent is subjugated to that of another person. Undue influence gets alleged when there appears to have been some kind of pressure exerted on the testator to leave assets to someone other than the natural heirs. Undue influence often is accomplished by threats to reveal some indiscretion by the testator or to impose physical harm.
You need not prove that the testator lacked mental capacity or was otherwise mentally impaired. The challenger only has to show that the testator would have made a different disposition of property than what was done, and that the pressure or influence inflicted directly led the testator to sign the will or trust. Medical or psychological records supported by testimony from witnesses is essential to prove undue influence as well as expert medical testimony regarding the testator’s state of mind.
5. Lack of Testamentary Capacity
Lack of testamentary capacity at the time the will was drafted and signed is another common basis for challenging a will’s validity. This is not an easy thing to prove. Courts presume a testator was of sound mind when the will was signed, and it takes substantial evidence to overcome this presumption. It’s a high bar to clear, especially if the will was signed years ago, and typically requires medical records from the time the will was signed. Occasional instances of unreasonable or illogical behavior or testimony regarding peculiar idiosyncrasies are rarely sufficient, especially if the testator had moments of lucidity. If the will was signed in an attorney’s office, it may be more difficult to prove lack of capacity since attorneys are usually careful to note evidence of the testator’s state of mind.
[ac_popup imagesrc=”https://www.themckenziefirm.com/wp-content/uploads/2014/04/Denver-Estate-Planning-Attorney.jpg” linkid=”myModal2″]
6. Improper Execution
People who draft their own will frequently fail to follow all the requirements for proper execution. In Colorado, the testator must be at least 18 years of age and be of sound mind. He or she must sign the will in the presence of two disinterested witnesses (i.e., two people who have no financial interest in the will). If the person is physically incapable of signing, the testator may designate another person to sign for him or her, so long as that person is not one of the two required witnesses to the will’s signing. Each witness must sign in each other’s presence and observe the testator’s signing or be told by the testator that the signature is that of the testator.
7. You Should Not Leave Someone Out of Your Will Without Professional Assistance
If you have questions regarding disinheritance, contact Dan McKenzie, a Denver wills, trusts, and estates lawyer. Mr. McKenzie has been advising, drafting and litigating issues regarding the validity of wills and trusts for years. Call our office today if you were disinherited from a will or if you need advice on disinheriting someone from your estate.
If you think it might be time to think through your estate plan, you can:
- Give us a call at 303-578-2745 to schedule a “Discovery Session” at which we can determine whether our firm would be a good fit for your needs. Or fill out our contact form to have us call you.
- Visit our estate planning page to learn more about how proactively thinking through your estate plan can protect you and your family, minimize hassle, lower the chance of family discord, and minimize or eliminate taxes.
- Get a copy of our estate planning checklist to see where you currently stand.
- Learn more by attending one of our free webinars, reading our blog, or watching our videos.