Figuring out how to distribute your assets upon your passing is one of the most difficult parts of estate planning, especially if you have complicated family dynamics. While there are certain estate planning tools you can use to alleviate some of your fears, such as utilizing a spendthrift trust if you’re afraid that a beneficiary will quickly spend their inheritance away, you might find yourself simply wanting to pass over a relative in your asset distribution scheme.
But the thought of disinheriting someone might give you pause. That’s normal. But don’t let the hesitation cause you to bypass this possibility, as it could be in your estate’s best interests and bring your vision of the future into reality. In this post, then, we want to look at some of the common reasons for disinheriting someone so that you can fully think through whether disinheriting one of your relatives is right for you. Hopefully then you’ll have peace of mind as you move forward with the creation of your estate plan.
When should you disinherit someone?
Ultimately, only you can answer that question. That said, here are some of the most common reasons to cut someone out of your inheritance scheme:
- Divorce: If you end your marriage, you probably don’t want your former spouse to take on your assets once you pass away. Yet, that very well could happen, especially if you’ve already created an estate plan that needs modified.
- Troubled adult children: Although you can’t disinherit your minor children, you can do so with your adult children. This might be an option for you if you have a child who is struggling with addiction. Leaving them an inheritance could fuel their addiction, thus causing harm to your estate, quickly depleting your assets and spurring your child down a road of darkness. Here, disinheriting them could be the best thing for your child.
- Estrangement: If you’ve had a falling out with a relative and are no longer on good terms, then it might make sense to cut them out of your estate plan. Otherwise, your assets could wind up in the hands of someone that you don’t care about as much, which leaves less for you to distribute to those you truly love and want to support.
- A loved one who is already receiving benefits: If you have a loved one with special needs who is already receiving assistance from the government and other funded programs, then they may not need an inheritance. In fact, in some situations an inheritance could disrupt the benefits they receive. Of course, there are also ways to reduce or eliminate that risk, such as by using a special needs trust, so you’ll want to think carefully about whether disinheriting someone under these circumstances is truly what you want.
- You’ve already provided gifts: One way to support your loved ones is to give them financial gifts during your lifetime. This allows you to see them enjoy their gifts, and you can give a significant amount of wealth to an individual each year without incurring any taxes. If you’ve already given a loved one a significant amount of financial support through these gifts, then you may want to reconsider whether leaving them additional wealth through your estate plan is really what you want.
Create the estate plan that helps you attain your goals
There are many nuances to the estate planning process. You have to know how to address each of them if you want to increase the chances of bringing your vision of the future into reality. So, if you’d like to learn more about how to craft the estate plan that you want, then now is the time to discuss the matter with your attorney.