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The dish on disinheriting

January 2019 | Candace Dellacona, Esq.
We often receive calls to the National Legal Office from members looking to disinherit a family member. This is not as unusual a request as you may think; statistics show that nearly 30% of decedents remove a family member from their estate plan entirely or leave an unequal distribution to family members.

Disinheriting a Spouse
In New York State, the only person you cannot entirely disinherit is your spouse, who is protected for public policy reasons. The thought is if an individual were allowed to disinherit their spouse easily, the disinherited spouse would then become a public burden and rely on social services for support.

As such, spouses can only be disinherited when there is a legal agreement between both spouses “waiving” their respective rights to the other’s estate. This “waiver” allows each spouse to leave his or her estate to whomever they choose. The presumption is both spouses have been counseled regarding the assets they may be giving up by signing the waiver. If no waiver is signed, a disinherited spouse can petition the court for at least one-third of the predeceased spouse’s assets.

It’s important to note those individuals having marital problems cannot easily disinherit spouses either. A marital separation does not automatically sever the right to inherit from a deceased spouse; a final decree of divorce or a legal separation that includes the waiver to each other’s estate is the only way to sever an inheritance between estranged spouses. Accordingly, it is important to change your Will as soon as a final decree of divorce is issued; if a divorce proceeding ends up being a long process, make sure to have a separation agreement waiving the rights to each other’s estate.

Disinheriting a Child
Children are not entitled to inherit from their parents automatically. A child can be disinherited at the desire of their parents for any reason; no child, whether adult or minor, is guaranteed an inheritance. Parents may also choose to leave an unequal distribution to their children for any number or reasons. These reasons may range from financial stability or instability, the closeness of a parent-child relationship or even due to dislike of the child’s spouse.

There are also options for those who wish to provide an equal distribution to their children but are concerned about the way one of those adult children spends their money. One of these options is to create a Trust within a Will, known as a Testamentary Trust. As long as the terms of the Testamentary Trust do not violate public policy (i.e., if you divorce your current spouse, you are entitled to your inheritance), you can have drafted any parameters you deem necessary for your child to inherit the money in the way you envision.

For example, a Testamentary Trust can be drafted so the money is managed by a Trustee and your child only receives an income stream from his or her inheritance; any access to the principal of the inheritance would have to go through the Trustee. A Testamentary Trust can also be drafted in such a way that your child’s inheritance can be guarded against their spouse, whereby the funds would remain in the Trust and not be co-mingled with your child’s marital assets.

One of the greatest concerns we hear when drafting Wills is with the actual wording of the Will when it comes to disinheritance. Generally, children are mentioned in the Will if they are being disinherited, but not in the manner generally portrayed on television. Instead, we generally acknowledge the child’s existence but state, “I specifically disinherit my daughter Jane Smith, not for lack of love and affection but for reasons known to her.” There is sometimes no love lost between a parent and child, and thus we state, “I specifically disinherit my daughter Jane Smith for reasons known to her.”

Another common situation is the child receiving his or her inheritance outside of the Will via a non-testamentary asset such as a Tax-Deferred Annuity. In such a case, a statement is made acknowledging the child, but stating he or she has been provided for outside of the Will.

Disinheritance Suggestions
Many testators disinherit a loved one to make a statement they did not feel comfortable making during their life. In a case where the testator wishes to explain the disinheritance, such explanation does not belong in a Will. Instead, we would encourage the testator to write a letter explaining their motivation in such disinheritance. This letter, generally referred to as a “Letter of Intent,” explains the intention or reason behind the disinheritance or unequal distribution. It is not for public consumption but rather written to the disinherited party directly to provide the rationale for their disinheritance or unequal distribution.

If you are contemplating disinheriting a family member or providing an unequal distribution to family members, you should seriously consider using a Trust instead of a Will. A Trust is a substitute for a Will that provides a disgruntled family member less opportunity to contest the distribution. Without a Will or Trust, New York State dictates only family members are entitled to your assets and in what proportion.

If you have any questions about the matters discussed in this article, please contact your Legal Service Plan’s National Legal Office at 800-292-8063 or 631-231-1450.