Estate Planning: The Problems of Disinheritance and Alternative Solutions (There’s always a better way)

Parents and children each have duties imposed on the other by society, custom and tradition.  After the teen years, the family mobile dynamic often becomes broken, breaking the parent/child bond, and leading to estrangement.  When carried to the extreme, vengeful or unhappy parents may seek retribution by exercising the only remaining power they have left—disinheritance.

Disinheritance may be a parental attempt to save a wayward child from alcohol or substance abuse issues.  Other issues include parental concerns over a child’s spouse, concerns that a child never properly applied him/herself, abuse issues that cut both ways, or which ultimately lead to the denial of access to grandchildren.

I posit that the choice of disinheriting a child is akin to the death penalty—one reserved for only the gravest of circumstances and wrong-doing and then only implemented after a series of appeals.  Otherwise, if there are siblings, they will have to deal with the repercussions the disinherited child will inevitably raise.  These actions will be taken towards and involve the survivors who did inherit.  Those children’s relationships with the disinherited will forever be strained until some compromise is reached or one of them dies.  Moreover, the hurt inflicted by the disinheritance becomes “permanent” in the psychological sense, and there are always more than one side to any story.  And, is that really the legacy any parent wishes to leave—that of being such an old, unforgiving, crotchety cuss that the parting shot with one foot in the grave was the ultimate “gotcha?”

The result of the ultimate “Gotcha!” or disinheritance, is that the surviving children who were received an inheritance is that they may have to buy peace by carving out an appropriate, equitable share to the disinherited child.  In that case, the parent has effectively projected his/her own problems onto another child or grandchild, instead of having the courage and character to appropriately and properly address those issues with the estranged child themselves, during their lifetime.

And, of course, the disinherited child may bring a will or trust court action to invalidate the parent’s estate plan, with the hope of receiving an intestate share equal to the other children’s shares.  Not only will the lawsuit be stressful and upsetting to the other family members, it will be particularly hard on any child who is in charge of administering the estate.  Any court action will also diminish how much is left to distribute.

Reconciliation is possible, but difficult and not a frequent outcome.   A better alternative is for the parent to finish life being as good a parent as he/she can be, and at least try to be better than the child, adult child or not, and leave some incentive there to stop the cycle from passing on to the next generation.  Several alternatives should be considered:

·        Consider reducing the inheritance until such time as when (if ever) the parent and child are reconciled;

·        Put incentives in place in a trust that would reward the desired behavior and work towards normalizing the full inheritance;

·        Leaving some or all of the child’s inheritance to that child’s own children (who may themselves be the objects of neglect or abuse).

Leaving a reduced inheritance demonstrates that the child was once a part of the parent’s life.  It also provides an incentive to the child not to contest the will or trust. The use of incentives in a trust protects the principal, yet simultaneously incentivizes the person to turn away from destructive behaviors.  The last alternative recognizes that the grandchildren are not to blame for their parent’s choices and behavior.  It prevents inadvertent punishment of the grandchildren by allowing them to be recognized in the estate while bypassing the individual who was intended to be punished.  While it is an alternative to outright disinheritance, I view it as the last gasp of an otherwise dysfunctional parent who themselves would rather take bitterness to the grave than to appropriately address their own role in the dysfunctional relationship and make appropriate provision to heal the dysfunction, such as funding psychological assistance or a rehabilitation program.

We will be happy to explore each option with you in confidence in our offices.  Just reach out and contact us to arrange a mutually convenient time to meet.

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