Most parents have disagreements with their adult children sometimes, but only in a relatively few cases do these disputes develop into a full-blown rift. When a parent no longer feels a connection to a child, he or she may wish to exclude that son or daughter from his or her estate plan.
Generally, anyone can leave their money to whomever they want when they die. This means that you are within your rights to disinherit a child if you want. But you should be aware that doing so could have unintended consequences, such as the disinherited child contesting the will or trust in probate court.
Depending on the reason you are considering excluding a child from your estate, there could be an alternative that addresses your concerns while possibly avoiding legal action later. For example, if you do not want a child with a drug addiction to misuse his or her share of the inheritance, you could create a trust that conditions their share on going to rehab and passing regular drug tests.
Some parents feel that the assets should go to the kids who need it, instead of those who are already financially successful. Despite this possibly reasonable belief, the left-out children may resent not receiving anything. It also ignores the possibility that things might not go so well for them in the future. A “sprinkle trust” allows the trustee to periodically examine the beneficiaries’ financial standing and adjust their payments accordingly.
Of course, some parents are certain they do not want to leave anything to a son or daughter. One way to minimize that child’s case in probate court is to create a series of wills. Each will makes minor changes to the estate plan but always disinherits the child the same way. This establishes a pattern that could be tougher to challenge.
Source: Bloomberg, “You Want to Cut Your Kid Out of Your Will. Or Do You?” Lewis Braham, July 23, 2013