- February 13, 2019
- Posted by: Matthew Luedke
- Categories: Financial Planning, Probate & Estate Administration
Are you considering having to Disinherit a Child in Washington State?
Parents have many different reasons for wanting to disinherit one of their children. Whatever the reason, it is important to consider a few things when disinheriting a child.
Although it is always a painful decision, some parents feel like they have no other choice but to disinherit a child. If that is the choice you want to make, then know that there are good ways to go about doing so and there are bad ways to do it.
1) Consider a “Skip Bequest” to Grandchildren
If your child has children, you might leave his/her share directly to the grandchildren, perhaps in a trust or guardianship arrangement managed by one of your other children. That might be more palatable to you than leaving that family out of your estate.
2) Consider an Incentive Trust to Disinherit a Child
You might leave your child’s share to an Incentive Trust. This is a trust designed to encourage behavioral changes as a condition to receiving trust benefits. For example, if your goal is to encourage your child to be drug-free, you might specify that he/she must test free of drugs for a period of 24 months before he/she receives any benefit from the trust. You could also require that the child maintain steady employment and provide proof of same to the trustee.
3) Document Your Decision to Disinherit your Children
If you feel there is any possibility that your child might challenge your estate plan on the grounds that you lacked capacity, take steps now to help your other children defend against a challenge later. You might record an audio or videotape interview wherein you discuss your reasons for disinheriting your child. Additionally, it might be wise to secure from each of your physicians a letter affirming your capacity to make estate planning decisions.
4) Don’t Overlook Naming Your Child in Your Will or Trust
If you stay with your decision to disinherit your child, it might be tempting to not even identify the child in your estate plan. That would be a mistake. Were you to omit the child’s name entirely, the law could presume that you just had a memory lapse, and a judge could insert him/her back into your plan to take his proportionate share as a predetermined heir. To protect against this, you should specifically identify the child in your plan documents, and only then recite that he/she is left nothing.
5) Don’t Rely Exclusively on the “No Contest Clause”
While designed to discourage will contests, the common No contest Clause (“NCC”) often included in wills and trusts, standing alone, may not work. The NCC merely says that anyone who unsuccessfully challenges a will or trust receives nothing. It is designed to discourage a beneficiary from trying to get a larger share of one’s estate. However, if you propose to leave nothing to your child at the outset, he/she would have nothing to lose – and potentially a lot to gain – by challenging your plan. For this reason, it would be better to leave him/her something, say, just enough to discourage a contest. He/She would then have something at risk, and the NCC would have a greater chance of achieving its purpose.
Living trusts do work better than wills to avoid contests. First, the disinherited child has no right to see the trust and your assets. If you use a will, the probate is open to the public and your executor must notify the disinherited child. Second, Judges assume you were competent when you implemented the trust as you had to go through the process of transferring assets to the trust. With a will, you just sign the document.
Please call us if you have any questions about disinheriting a child at 509-328-2150 or click here to email us.