Everyone needs an estate plan regardless of the size of their assets. A properly written estate plan guarantees that your wishes will be honored when you pass on and that your assets will be distributed exactly how you want them to be. But what happens when things change and you need to disinherit someone?
At its very basic, disinheritance happens when you strike an individual or entity from your will. A good example would be when a parent, following a breakdown in the relationship, decides to leave an estranged child out of their will.
Disinheriting someone may be a tough decision to make. However, it is not as complicated as you might think to accomplish. Here are two ways you can remove a beneficiary from your will without plunging your estate and loved ones into a dispute.
Set aside property for the disgruntled beneficiary
Sometimes, you may feel the need to disinherit a child due to their questionable lifestyle. They probably have poor money management skills. In this case, you may have legitimate concerns that they will squander any inheritance you leave behind for them. To address this, you may remove the child in question from your will and, instead, set up a trust that will manage any asset that is apportioned to them.
Include a “no-contest” clause in your will
Also known as a “penalty clause,” a “no-contest” clause makes clear that the beneficiary risks losing their inheritance should they decide to contest the will. A no-contest clause, as the name suggests, is designed to discourage beneficiaries from disputing the will upon the testator’s passing. However, for a no-contest clause to work, the testator should leave some property for the disinherited member. If you leave them enough, they may think twice about risking everything just to get more.
There are several reasons why you might consider disinheriting a loved one. Find out how you can navigate the process of disinheriting a beneficiary without making your estate plans unnecessarily complicated.