Best Practices for Disinheriting a Family Member (And Other Alternatives Available to You)

Laura K. Meier
Creating estate, business, and life plans that ensure a family’s complete protection and well-being.

Choosing who you want to inherit from you when you pass away is not always an easy task.  While many people wish for their assets to go to their family members, others absolutely do not.

Unlike under California’s default laws that provide your money will pass to your next of kin if you die without a will or trust, you get to choose who inherits from you when you set up your own estate plan. (Keep in mind though that a legal spouse is typically entitled to their half of the community martial property even if you direct otherwise).

Who you wish to inherit from you is a deeply personal choice.

Not everyone wishes for their spouse, children, or parents, to inherit from them. Here are some common reasons people typically choose to disinherit their family members, and guidance from your California family trust, elder law, and special needs attorney on the best way to execute these wishes:

1.       You and your family member are estranged.

It’s not uncommon in the United States for family members to be estranged. One US study of adult-children found that 7% reported being detached from their mother and 27% detached from their father. 

Family members become estranged for all sorts of reasons.  Some clients share with us that they feel their parent abandoned them or was narcissistic.  Other clients feel their children were entitled or distant.

If you are estranged from a loved one who would have otherwise likely inherited from you given their natural relation to you, it’s important to talk with your California family trust attorney on how to best disinherit them under your plan.  The decision to disinherit should never be rash or be made to appease other persons close to you. And, if you have not fully come to terms with the status of your estranged relationship, it’s also wise to seek counseling from a trained family therapist who can help you navigate your complex feelings and circumstances.

2.       Your family member is wealthy.

Some people feel it’s not necessary to include a family member in their estate plan because that family member does not need the money in general, or in comparison to other family members. In those cases, it’s wise to document your reasons for disinheriting them to avoid any hurt or confused feelings.  When we help a client disinherit a loved one due to wealth, we usually recommend the client include a statement that says the client leaves their disinherited family member their love and affection, but not their assets.

3.       Your family member is reckless or irresponsible.

Many families have a family member who didn't seem to get their adult life together and are bad or reckless in their decision making.  They feel that leaving that family member money may enable them in poor spending choices, health choices, or lifestyle choices.  One solution for this dynamic is to leave the family member money, but to leave it to them in an asset protection trust that is supervised by another responsible adult.  This way, the money can be available to the family member for their health, maintenance, education, and support, but only on the terms you have authorized.  Leaving it in an asset protection trust also can protect the money you leave behind for your family member from their creditors, predators, lawsuits, or divorces.

4.       Your family member has a disability.

According to the Survey of Income and Program Participation (SIPP) data, approximately 54 million Americans have a disability. 

Many disabled persons are receiving or eligible to receive important government benefits with strict asset and income requirements, which they could potentially become disqualified from if you leave them money when you pass away.

Unfortunately, too many people with good intentions will disinherit their family member who has a disability out of fear it could disqualify them from receiving their important government benefits.

Instead, they leave the money to another family member with the hope they will use it to help the disabled family member.  This can create a host of other problems such as gift and estate tax issues, or lack of control over where the money goes when the ‘healthy’ family member dies.

Instead, it is wise to leave the money directly to a special needs trust established for the disabled family member’s benefit. This method will not disqualify them from receiving government benefits and allows you to control how the money is used for them, and where it goes upon their death.

If you have a special circumstance in your family and need to discuss disinheriting a loved one, we are here to listen to you, and guide you, without judgment. These decisions are deeply personal and sometimes painful, and our goal is to help you make all your financial and legal decisions in a way that fully aligns with your circumstances, your wishes, and your conscience.

Call your trusted Newport Beach, California family trust, elder law, and special needs attorneys today at (949) 718-0420 with any questions on your mind. Our Client Services Director Bonnie Johnson will make you feel right at home and help you with your next best step.

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