Disinheriting or Cutting Someone Out of Your Estate: Three Best Practices
After lots of thinking, attempts to repair a broken relationship and weighing of other options, you’ve decided you need to disinherit or cut a family member out of your estate plan. If you’re still wondering about whether to disinherit someone, read here about questions to ask before taking that far-reaching step. https://theestateplanner.com/2022/09/12/disinheriting-a-loved-one-three-important-questions-to-ask-first/
After considering all of the options, you’ve decided that no alternative is workable. It’s important to know that disinheriting a family member increases the likelihood that the disinherited person will be unhappy and challenge your estate plan. Here are three estate planning best practices to decrease the likelihood that your decision and estate plan will be challenged.
One: Be Direct
This is not the place for ambiguity. Make it very clear in your estate plan who you are disinheriting. Also clarify whether you’re just disinheriting that person or also disinheriting their children. Just omitting or not including someone in an estate plan, instead of explicitly stating that they’re disinherited, may not accomplish what you intend. State law may assume that you did not intentionally disinherit them, and may allow them to inherit anyway.
Two: Include an Explanation
One way a disappointed heir can attempt to invalidate your estate plan is by claiming undue influence. In summary, this is essentially a claim that someone exerted pressure on you to change your estate plan, giving them a bigger inheritance and the disappointed heir a smaller inheritance. Explaining why you’re disinheriting someone can help show there was no undue influence. A statement of intent or letter of intent can clarify your decision-making process, showing that you thought through your decision and no one pressured you to make it. This may help provide some protection against a disappointed heir’s ability to invalidate your estate plan through a claim of undue influence.
Although the reasons to disinherit someone are as unique as each family, some possible explanations include:
- You’re no longer in contact or you’re estranged
- You’ve already provided for the family member through gifts or other assistance
- The family member you’re disinheriting has no need of an inheritance, but other family members are less well off
Three: Add a No-Contest Clause
A no-contest, or in terrorem clause, is one method of helping ensure that your decision to disinherit someone is not invalidated. The no-contest clause essentially prohibits a beneficiary from receiving a gift under a will or trust if that beneficiary contests the terms of an otherwise valid will or trust. For the no-contest clause to be an effective deterrent, the beneficiary must receive something meaningful under the estate plan. What is meaningful will depend on the amount at stake, but a de minimus amount will not be an effective deterrent. For the no-contest clause to work, you cannot completely disinherit someone.
Although a no-contest cause can serve as a deterrent to litigation, it’s important to realize that it does not prevent it. A disappointed beneficiary can still bring a lawsuit to invalidate an estate plan, they just do so at the risk of losing whatever they were gifted in your estate plan.
Hopefully, you never have to experience the heartache of disinheriting a family member. But if you do, these three practices should help decrease the likelihood that your estate plan is challenged by someone disappointed by their lack of an inheritance.
Note that this blog is for informational purposes only and is not legal advice. Additionally, before disinheriting someone, it is important to consult with an estate planning attorney as every family’s situation is unique and state laws vary. For example, spouses have a number of protections under state law, and to be effective, a complete disinheritance will most likely require a postnuptial or prenuptial agreement.
An estate planning attorney can help you work through these difficult questions and prepare the best plan to meet your goals.
Contact The Estate Planner LLC in our St. Louis office at 314-303-3218 for assistance with estate planning in Missouri.
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Written on September 27, 2022 by Stephanie Copp Martinez, JD