Disinheriting with kindness
Families do not always work out as expected and it sometimes happens that a parent is strongly tempted to disinherit one or more children from her will. This is not recommended. However, if your intent is serious, before taking that step there are some considerations to mull over before potentially disinheriting your child and before leaving the task to advise him or her to the executrix of your estate after your death.
First, it is generally understood that parents initially leave their estates each to the other and then equally to their children unless they have made other arrangements through establishing trusts or otherwise. Obviously there is no rule and you can leave your estate to whomever you decide to leave it but children often have this expectation. In the meanwhile during your lifetime, one or more of your children might remain close to you or your spouse and others might drift away only to be heard from by card on an occasional birthday or holiday. When crisis strikes you might want to rely on that dependable child and feel disappointed by your distant child.
Your estrangement could have resulted from disagreements either about how you are living your life or how they are living theirs or even some argument
where no one remembers how it began.
Sometimes in-laws complicate matters and you might not relate well to a daughter in law or son in law. First, I might recommend, before disinheriting the distant child you give the relationship another chance. If that is not going to work and, in some cases, you as the parent might not even know where the child is anymore, I would suggest the following.
Do not simply leave your child out of the will. If you name all of your children but one and leave that child’s name out of the will, you raise the possibility that there was misunderstanding and it happened by mistake. You can, if you wish, state at the beginning of the will the individuals and family relationships and include the child stating you realize you have another child who is not provided for in this will.
Soften the blow by other means. Here are some examples:
• You might leave a smaller account, IRA, CD or other inheritance to the child so the child is not completely disinherited. Understand that children often interpret what their parents have left to them as an indication whether their parent loved them. If you can, try to soften the blow.
• Do not ever leave a $1 inheritance or other similar very token amount. This only causes hard feelings and most parents do not want to cause unnecessary dissension after their death.
• If your child received a substantial loan from you that was never repaid or if you have otherwise made provision for your child during your lifetime, you might include in the Will a statement such as “Having otherwise provided for my child during my lifetime I am not leaving a bequest to my child in this will. However, this is not due to any lack of regard or affection on my part.” If you find other wording that serves the same purpose you might use it.
Occasionally parents fail to leave an inheritance to one child on the theory that child does not need the money. This is not recommended. Again children often interpret their inheritance as how much they were loved during your lifetime.
On the other hand, if you want to leave more to your child who has greatly assisted you, there are ways outside the will.
• Family Agreement – Where one or more children contribute substantially more to help aging parents, a written pay-as-you-go agreement during your lifetime may help to compensate them for their time and assistance and you do not have to wait until you die.
• Life Insurance - Life insurance naming the child as beneficiary where you have otherwise provided for your funeral and final expenses is one way to say thank you.
• Gifting During Life Where there are adequate funds and you are not concerned about Medicaid or other gifting restrictions you might use the annual $14,000 exclusionary gifting amount to compensate those who help. Get advice first.