It’s Your Money

 

It should be possible to leave your assets when you die to whomever you want. We live in a country with little of the forced inheritance laws found in many countries. What little we do have is generally about not disinheriting the surviving spouse.

Unfortunately, successfully disinheriting a child is not always so easy.

First, this is not a do-it-yourself endeavor. I know it sounds self serving, but you really need an experienced estate planner in your corner for this one. There are too many cases of disinherited children contesting a parent’s estate plan after the parent dies, and managing to extract something from the estate, against the parent’s valid wishes. I teach these unfortunate cases in my law school classes.

The four primary avenues of attack on a Will or Trust by a disinherited child are: Lack of Mental Capacity to Make a Will or Trust; Undue Influence (by one or more of the people who got something under the Will or Trust); Duress; and Fraud.

Wills operate under the so-called “Worst Evidence Rule.” The person who made the Will (the testator/testatrix) and died is unavailable to testify as to his/her intent and give evidence regarding undue influence, etc. You might think that there should be a process whereby the testator/testatrix could submit the Will to court to probate it during life. You would think this would be a great way to shut down post-mortem claims that a disinheritance was unjustly obtained. But there are numerous problems with such a process (too many to describe here), and for that reason only eight states have adopted such a statute (Massachusetts is not one).

Which brings us to funded revocable living trusts. For a variety of reasons, living trusts are generally more difficult to contest. If the trust creator funds the trust and actually manages his/her assets and pays bills with trust bank accounts, this is strong evidence that the trust creator was not only competent but was quite familiar with the terms of the trust. Depending on state law, it may be that only those named as beneficiaries of the trust need be notified at the death of the person who created the trust, rather than (in addition) all persons who would be the heirs of the deceased had the deceased died without a Will.

Other methods that bypass probate on death include holding assets as joint tenants with right of survivorship (with someone you don’t want to disinherit), and naming death beneficiaries directly on assets like life insurance and IRAs. However, these methods can cause significant other problems (like assets passing in amounts and to persons you didn’t really intend) compared to a revocable living trust.

Some people want to include No Contest (“In Terrorem”) clauses in Wills and Trusts. These provide that if someone challenges the Will or Trust, they get nothing. But this only has a chance of working if the unhappy person was actually left something in the Will or Trust; not the full share they feel entitled to, but at least enough to discourage them from risking getting nothing.

Other techniques that can be used all have their pros and cons. They include videotaping the ceremony where the decedent signed his/her estate planning documents; having medical professionals, priests, or other hard-to-impeach persons as witnesses to the signing; or executing a series of Wills or Trusts over time which require the contestant to successfully challenge one after another in court. But no matter what you do, nothing is foolproof. Even estate plans approved by the Probate Court, with notice to disinherited children who did not object, have been later challenged by those same disinherited children, with at least partial success.

Blended families face unique challenges. Friction between stepparents and stepchildren can explode, when one parent dies and the second spouse is left without the other parent as a buffer. Tensions that were kept under the surface may bubble up quickly.

One last thought. Parents who are not treating their children equally are frequently reluctant to tell their children, who find out about it when their parent dies. If at all possible, it is best for the parent(s) to have a family meeting with all involved, and set forth what their estate plan says for all to hear. After consulting with the attorney about the pros and cons, it may even be helpful to videotape it. But in general, it seems that transparency, while the parents are reasonably vibrant, is the best way to ensure the parents’ wishes are ultimately fulfilled.

 - Posted by Attorney Mark W. Worthington

Special Needs Law Group of Massachusetts, PC can advise you on creating an estate plan that fits your unique circumstances.

Learn more about Special Needs Law Group of Massachusetts here.

This blog post does not constitute legal or tax advice, even if you are presently a client of Special Needs Law Group of Massachusetts, PC, nor is an attorney-client relationship created by reading it. If you want legal or tax advice, you should retain a licensed attorney or tax advisor for that purpose.