Thinking of Disinheriting Someone? Think Again

Thinking of Disinheriting Someone? Think Again

Almost every family has at least one member that doesn’t really fit the mold, and sometimes the discrepancy is so extreme that it would be a bad idea to leave them a large inheritance. If you have a child with a drug addiction or history of gambling, for instance, you’d want to protect them from themselves even after you’re gone.  But think again before you decide to disinherit that “black sheep.”

Disinheriting a family member is more common than you may think, and it’s not reserved only for millionaires who disapprove of their child’s lifestyle. Reasons may vary; some choose to disinherit an older child because they need to reserve family resources for a disabled sibling, others want to balance out an unequal distribution of assets during their kids’ lifetimes. There can be legitimate and loving reasons to consider cutting a descendant out of a will.

Despite the justification, however, the decision to disinherit someone should not be made lightly, for several reasons.

What’s at Stake if You Decide to Disinherit?

It’s more likely that someone will contest the Will. “If the parent is adamant about not leaving anything to that child, they need to be prepared for litigation. Chances are the child will dispute the will,” says Vancouver lawyer Julia Barsel in a recent article warning against making hasty decisions to disinherit. Our Canadian neighbors have probably observed the same thing we have, namely that inequality (or perceived inequality) can lead to litigation. While contesting a living trust is considerably more difficult, expensive, and time consuming than contesting a will, unequal distribution of income may lead some family members to believe it is their only option. The estate plan, as written, denies them what they consider their rights. It’s likely they will at least try to fight for more. Even if they lose, the estate will have to expend funds for lawyers fees and court costs, and may even have its assets frozen until a resolution of the dispute.

It’s more likely that family harmony will be negatively affected. While it might not be surprising or unexpected, it’s still difficult to accept the cold hard truth that your own family members decided to disinherit you. Contesting the terms of distribution may not be the only way a disgruntled descendant can strike back at their family. Discord resulting from money disputes can ruin multiple relationships, and last through generations. Just take a look at some famous examples to see how money can divide a family.

It’s more likely that money will pass outside the estate. Sometimes parents make the decisions to disinherit their child in an attempt to foster self-control and independence. Yet children can be more resourceful than expected, particularly if they have siblings or cousins who have inherited what they consider their rightful share. This can create an even worse situation, where a desperate child begs his brother for assistance that the parents specifically chose to deny, or an ex-wife pressures her brother-in-law to provide for his nephew.

The problem stems from the lack of control that disinheriting creates. While you are alive, you can place conditions on your financial support that are designed to ensure the recipients of your generosity have a healthy relationship with money. After your death, however, your money no longer comes with a guiding hand and good advice.

A Better Alternative to Disinheriting

The good news is that disinheriting is not your only option. Comprehensive estate planning has many tools that have been proven to avoid common inheritance mistakes, so you can rest easy knowing that your loved ones won’t self-destruct upon your death. One popular way to continue providing guidance after your death is to set up a trust, where the inheritance you provide your descendants is managed by someone other than the recipient. Trusts are a wonderful way to leave instructions and/or restrictions on an inheritance, and are a great alternative for anyone tempted to disinherit.

Another option is to leave your “wild child” something meaningful, and insert a “No Contest Clause” that denies the inheritance to anyone who contests the will. This way, any dissatisfied heirs will have to consider whether engaging in litigation is worth the potential loss of absolutely everything. No Contest Clauses can be difficult to enforce, however, so be sure to seek professional advice before including one.

In any case, the choices you make will determine the quality of the legacy you leave behind. Let The McKenzie Law Firm help you make these difficult choices. Make an appointment to talk to us about your concerns, and hear how we can help.

Tienne McKenzie
Tienne McKenzie
tienne@themckenziefirm.com

Tienne is a paralegal specializing in estate planning.