Irreconcilable differences: How to disinherit someone

Money, Family/Kids, NakedLaw, Relationships

“Do it, and I’ll cut you out of my will.”

That line, uttered in countless movies and TV shows, makes it sound easy to disinherit a wayward friend or relative—just write them out of your will. In reality, it isn’t always that simple.

Even though your will expresses your wishes about who inherits specific portions of your estate, limitations apply if you want to omit certain relatives. And in any case, you need to take several steps to ensure that your wishes are carried out.

Spouse’s rights against disinheritance

If you would like to write your spouse out of your will, you’re unlikely to be able to do so entirely. Most states have what is called a spousal right of election. Even if a will specifies that a surviving spouse is to receive nothing, state law gives him or her the right to take a certain amount of money and/or assets from the estate—this is called an elective share. You can’t get around this by leaving your spouse $1 either. He or she has the right to the full amount specified by state law. The amount is usually one-third of the estate, or one-half if there are no children (each state is different, so check your state laws). The surviving spouse claims the right of election during probate proceedings.

Disinheriting children and grandchildren

You can leave a minor child out of your will, but your estate will still be responsible for supporting that child until adulthood. Adult children and grandchildren of any age can be disinherited in a will if you wish to do so, but be sure to include a clause that specifies you are leaving nothing (or a very tiny amount) to the relatives you want to leave out, to clarify that your intent to leave the person nothing is not an oversight.

Leaving a small token inheritance may help deter the relative from contesting the will. It is also a good idea to specifically say why you are leaving a child out, or giving him or her a much smaller share. For example, if one child is independently wealthy, you may feel that your other children could use the money more. Explaining that can ease the sting.

Living trusts provide protection

No matter how careful you are in preparing your will, there is always the chance that someone may contest it. It’s not easy to overturn a will, but it can be done. Questions about competency, concerns about fraud or undue influence, problems with the execution of the will, or ambiguous language can all result in a will being completely or partially overturned.

The solution is to create a living trust. A revocable living trust allows you to place your assets into the trust during your life (the trust will own them going forward) and determine to whom they are distributed after your death. You can continue to use your assets and spend your money as you normally would, and you can cancel or change the trust at any time. The magic of it is that a trust cannot be contested in probate court because trusts don’t go through probate. (It is possible to bring a lawsuit against a living trust, but it is much more difficult to do than to contest a will.) Even with a living trust, however, your estate will be responsible for supporting your minor children, and, in some states, the spousal right of election will apply to the trust.

Distribute during life

If you don’t want to deal with wills or trusts, you can distribute your assets as gifts during your lifetime to whomever you choose. Gifts aren’t restricted to cash; you can also transfer title of real estate and ownership of accounts during your lifetime or give away personal property.

Just keep in mind the gift and estate taxes. You have a lifetime exclusion, currently $5,450,000, of assets that you can distribute as gifts while you are alive or as bequests after you die. Exceed that amount and you’ll be liable for either the gift or estate tax. (That $5,450,000 applies to the total of gifts and bequests, so any portion of it you use for gifts while you’re alive won’t be available to shield your assets from the estate tax after you die.)

There is, however, also an annual exclusion, currently $14,000, that you can distribute to any individual without it counting against your lifetime exclusion. Moreover, you can use that annual exclusion for any number of recipients. So, for example, if you have five children and 15 grandchildren, you could give each of them $14,000 a year without incurring the federal gift tax or eating into your lifetime gift and estate tax exclusion.

It’s a lot to keep track of, so consider your options carefully. Instead of cutting someone out of your will, you may find that a gentler approach—airing your grievances and making amends while you still can—is the better, more effective route in getting what you want.

More information: