You’re Out! A Few Things You Should Consider Before Disinheriting a Child

[Music] By this Keith Davidson from Albertson and Davidson in this video I want to give you some information to consider if you're thinking of disinheriting your child from your trust or will disinheriting a child sends a very powerful and often painful message to that child even when that's not necessarily the intent of the parent a lot of children associate being disinherited with having a lack of love or equality with the other siblings and that can be very painful especially after a parent dies and for those reasons a lot of times when a child is disinherited you'll have a trust or will contest bite on your hands and so I want to talk a little bit about how to avoid those contest fights if you can so if you think you want to disinherit a child the first piece of advice I would ask you to consider is think about are you sure you really want to do that in other words there's a lot of different ways to structure gifts to children you don't have to just out-and-out disinherit them if you have a child where you think that they're irresponsible with money or maybe you're afraid that they're going to get a divorce and lose some of their inheritance in a divorce fight there's ways to structure your trust to protect that child from those issues and that is you just create a children's trust it's an irrevocable trust you can have an independent trustee manage those trust assets for the child and then the child can get distributions from that trust to the extent that the child needs it but they can't just have the money and spend it all or be irresponsible that's just one example there's a lot of different examples to address whatever issue you have with your child so the first piece of advice I'd give you is are you sure you really want to do it and talk to your estate planning attorney about alternatives to disinheritance because there's a lot of alternatives and trusts in particular are very powerful documents they're very flexible there's a lot of things you can do with a properly drafted trust to help plan for your family issues so that you don't have to go to the extreme measure of disinheritance the other piece of advice I give you if you don't if you still don't want to give your child anything is consider giving the child a smaller gift and then include a no-contest clause in your trust if you disinherit your child and you give them nothing then that child has absolutely no incentive to not sue your estate because what do they have to lose if they're already cut out and they're getting zero they might as well contest the will or trust and try to get something whereas if you give that child a gift of some amount that is meaningful to the child and you tell them but if you can test my trust then you're gonna get zero now that child has something to lose so let's say you have a three million dollar estate and one child was going to get a million dollars but you want to disinherit them well rather than just giving them zero consider giving them a gift of maybe $200,000 and then put a no-contest clause in your trust now the child has to decide do I want to lose the two hundred thousand to try and go for a million or do I want to just take the two hundred thousand and not file a trust contest yes you're still giving the child some money even though you wanted to disinherit them but at least you're building in some sort of incentive to stop them hopefully from suing your your estate after your death so it's something to consider the amount of gift that would be meaningful child that's up to you you have to decide what's right for that child maybe in my prior example 200 thousands too much maybe fifty thousand would be enough to have an incentive maybe 200 thousands too little maybe you have to give five hundred thousand I don't know your individual situation but again give us some consideration and think about what you can do to avoid a trust contest after your death so let's say you still want to disinherit your child I still haven't convinced you to consider options one or two in that event if you still want to give that child zero then you had better prepare for a trust contest because in all likelihood that's going to happen so that means you want to talk to your lawyer about how can we help support this trust after your death so that it can be hopefully upheld the first thing that you might want to consider doing is getting a valuation by a doctor to make sure that you have some medical evidence that you have capacity especially if you've ever been diagnosed with dementia Alzheimer's or any type of strokes and symptoms that doesn't mean you lack capacity but why not have it documented in the file it'll make the trust harder to attack at the end of the day the other thing you might want to consider doing is get an independent review of your trust documents by a separate lawyer from the one who drafts it then you have two different lawyers who can testify after your death that yes this was the the proper intent of the decedent and when you get an independent review it's very difficult to attack that trust because you have two different lawyers who are going to testify that it was properly drafted the third thing you should consider doing is putting an explanation for why your disinheriting the child and don't have your lawyer draft it in legalese because anytime you see a legalese description of why a child was disinherited it seems contrived and fake what you want is something in your own voice that explains why you're doing this you don't have to be mean about it but maybe there's a reason behind your decision and if so you should state that either in the trust or in a document that you reference in the trust so that not just you but the court also will know why you made this decision and that can be a very powerful thing for everybody to see after your death to help support your trust the bottom line here is that disinheriting a child is a far more powerful and painful Act than you may realize so you really should give it some very careful thought and then try to plan it out if you still want to do so. [Music] [Applause] [Music]