How to Deal with an Estranged Child in Your Estate Plan
Unfortunately, not all families get along. If you are having problems with one of your children, you may not want them to benefit from your estate. There are several strategies for dealing with an estranged child in your estate plan. This was the subject of an article last year from the Elizabethtown, Kentucky News-Enterprise entitled “Estate Planning Must Account for Estranged Children”
Depending on the level of estrangement and the reasons for the estrangement, the following are the main approaches for treating a child differently in your estate plan:
- Outright disinheritance. If you really do not want your child to receive anything from you, you can fully disinherit the child. To be safe, even if you are leaving a child nothing, you should specifically mention the child in the will and state that you are disinheriting him or her; failing to do so could make it easier for him or her to challenge the will. (You also need to specify whether you are disinheriting that child’s children, too.) To avoid a will challenge or a forced heirship challenge, it is usually best to state the reasons why the child is being disinherited.
Disinheriting a child comes with a risk: He or she may contest the will in court, which can cost your estate time and money. There are steps you can take to try preventing a will contest, including making sure your will is properly executed, writing a letter to the estranged child to explain your reasoning, and removing any appearance of undue influence. Keep in mind, however, that nothing is foolproof. Also, even if you take all steps necessary to avoid a will challenge, the child can still claim to be a forced heir under Louisiana law. Forced heirship is not gone forever as many think. There are particular circumstances that might subject your estate to a forced heirship claim, and there are defenses, both stated in the Louisiana Civil Code (under “disinherison”) as well as other asset protection strategies you can take to avoid a forced heirship claim. If you are disinherting a child (partially or fully), and you think your child might challenge the will or make a claim as a forced heir, you should speak with me to avoid estate litigation after your death.
- Smaller inheritance. If you don’t want to disinherit your child entirely or wish to make it less likely the estranged child will contest the will, you may want to leave them an inheritance that is smaller than the amount you leave to other beneficiaries. Leaving a child a reduced inheritance may prevent him or her from contesting the will, especially if you include a no-contest clause (also called an “in terrorem clause”) in the will. A no-contest clause provides that if an heir challenges the will and loses, then he or she will get nothing. You must leave the heir enough so that a challenge is not worth the risk of losing the inheritance.
- Put the inheritance in a trust. If the reason you do not want to leave your child an inheritance is because you are worried about how they will use the money (for example, if the child is addicted to substances, is financially irresponsible, or may have creditor issues), you can leave the child’s inheritance in a testamentary trust. You can provide instructions to the trustee on when and how the trustee should disburse the funds in the trust. For example, you can instruct the trustee to disburse the money in small increments or only if the child meets certain conditions, like staying drug- or alcohol-free or working a full-time job.
Figuring out how to treat an estranged child in your estate plan is complicated and emotional. As Leo Tolstoy wrote in Anna Karenina, “Happy families are all alike; every unhappy family is unhappy in its own way.” Talk to your attorney to determine the best strategy for you.
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.
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