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Epoch Times
07-05-2025
- General
- Epoch Times
Reasons to Disinherit Someone and How to Do It
By Donna LeValley From Kiplinger's Personal Finance What if you no longer want to include someone in your will? Well, how you choose to divide your estate is a personal decision and entirely up to you. There may come a time when you need to update and change the beneficiaries in your will because you no longer want to leave them a bequest or have them inherit anything from your estate. To show your intention to disinherit someone, there has to be actual language in the written will stating that this person is disinherited. No reasons have to be given, but the language that is used has to be clear and easy enough to understand to prove that this is in fact your intention. Those considering how to disinherit can use either a disinheritance clause or leave a bequest with a no contest clause to cut off any challenges from anyone dissatisfied with what was left to them. What Happens if You Die Without a Will If you die without a valid will, you die intestate, and your state's intestacy laws determine how your assets are distributed, typically to close relatives. Intestate succession laws would then dictate the order in which your assets are distributed to your heirs. The order of intestate succession begins with the decedent's immediate family and extends out to distant relatives. Close relatives like spouses, children, grandchildren, parents, and siblings are typically prioritized. Spouse, children, and grandchildren Parents and siblings Nieces and nephews Grandparents Aunts and uncles Cousins Do You Have to Disinherit All Possible Heirs? Fortunately, the law doesn't require you to name each and every blood heir that could possibly inherit under intestate succession. Laura Cowan, estate planning attorney and founder of 2-Hour Lifestyle Lawyer, says you need to be clear and plan for contingencies or what she calls 'the exploding Thanksgiving turkey.' This is a hypothetical example of what would happen to your estate if all of your heirs died simultaneously. She said you can make sure your money goes where you want it to by naming successors to stand in the place of your heirs, such as allowing your grandchildren to inherit in the place of your children if they should predecease you. This is called a per stirpes designation. Per Stirpes, a Latin phrase meaning 'per issue,' is a legal term that directs that each branch of the family inherits an equal share of the estate in accordance with the wishes of the testator (the person who created the will). As such, the beneficiary's share of the estate will be passed on to the beneficiary's heirs or descendants, even if the beneficiary should die before the testator. Related Stories 2/18/2025 1/22/2025 After exhausting your list of intended heirs and beneficiaries, you can name a charity or another entity to inherit your assets. This demonstrates your intentions and shows that you contemplated what would happen if your heirs/beneficiaries were deceased and where you want your assets to go. People You Can't Disinherit There are some people that you can't disinherit. You have a legal obligation to financially support your minor children and can't disinherit them. As long as your estate has assets, state law would dictate that those assets be used to pay for the care and maintenance of any minor children. And without a prenuptial or postnuptial agreement, you can't disinherit a spouse. Spouses are entitled to their 'elective share' regardless of the deceased spouse's wishes or what was in their will. If a spouse is overlooked or explicitly excluded, they can elect to receive their statutory percentage, typically 30 percent to 50 percent of the estate of the deceased spouse. The size of an elective share varies because it is based on state law. Reasons to Disinherit a Family Member 1) Divorce and Second Marriages Why? A change in marital status should prompt you to look over your estate documents. It's important to update your will after any divorce or remarriage; particularly if you have children from your prior relationship. Your new spouse will have statutory spousal inheritance rights, and depending on the state in which you are married, he or she might be entitled to at least half of your estate. If you have divorced, not updating your estate plan could mean your ex-spouse could still inherit directly from the will or as a designated beneficiary on one of your investment or retirement accounts. How? If you want to leave an equal share to all your children, it might mean your current spouse would receive less than what they are legally entitled to. This is a circumstance where you must put this in writing and get your spouse's consent. This can be achieved with a prenuptial agreement, postnuptial agreement or a separate legal document. 2) Troubled Offspring A parent can disinherit an adult child for just about any reason or even for no reason at all. Why? Sometimes, parents don't have a good relationship with a child. That can be enough. However, one of the most common reasons for disinheriting a child is when the child is erratic or has some specific problems they are dealing with. These could include addictions to alcohol or drugs. In these circumstances, parents may realize that any money, assets, or property left to the child may contribute to or exacerbate the problem. How? Simply leaving the name of your child out of your will is not enough to guarantee that he or she doesn't receive part of your estate. If you want to disinherit an adult child, you must include this explicit information in your will, making it clearly understood that the omission is intentional and not an oversight. Otherwise, a court might assume the exclusion in estate documents was unintentional and award an equal share to the adult child not named. 3) Child or Grandchild With Disabilities Who Is Receiving Benefits Why? There are situations where cutting someone out of your will is the best decision for your heir. If you have a child or grandchild who has disabilities it may make sense to legally disinherit them. The reason for this is benign; the income from your estate may disqualify them from accessing any government assistance they would otherwise be entitled to receive. Most federal, state or local disability benefits include guidelines regarding the amount of money a recipient can earn or type of property a person can own without having it impact their benefits. If you were to leave an inheritance directly to your child or grandchild, they may lose those benefits. That doesn't mean you can't still help them financially and make sure their needs are met. Cowan says the use of a special needs trust or supplemental needs trust would allow you to set aside money for their enjoyment and care without upending their eligibility for government programs and assistance. The trust is irrevocable and is managed by a trustee for the benefit of your heir. By not owning the assets, the trust beneficiary preserves your child/grandchild's eligibility for need-based government assistance programs. It is the best way to ensure your loved one's financial needs will be met, even after you are no longer able to care for them. How? The best option here is the disinheritance clause. Because you can still pass assets to your child/grandchild through a supplemental needs trust and any monetary bequest could disrupt their care plan. 4) Leaving Your Estate to Charity Why? You've decided to leave all or the majority of your estate to a charitable cause. There can be a variety of reasons for this, including the ones listed above. Regardless of the reason, you need to be explicit about your wishes to leave your estate to a charity and not any of your heirs. If you have already designated other beneficiaries to receive any portion of your estate, you will need to disinherit them or revoke your existing will so you can designate the charity of your choice. How? First you must determine your personal and financial goals in making a charitable gift to determine the best gifting strategy. These are three ways to pass assets to a charity: Will or trust. If you want to leave the charity property, be very clear about the name of the charity and include its taxpayer identification number (TIN). This will avoid a mix-up as many charities can have similar names. TIN numbers are usually available on their website. Designate it as a beneficiary. A charity or nonprofit can be the beneficiary on your investment accounts, or life insurance policies. Donor advised fund (DAF). You can contribute cash, securities, real estate or other assets to a DAF. A huge plus to tax planning is that the contributions are considered a gift to charity for tax purposes. ©2025 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
Yahoo
04-05-2025
- Business
- Yahoo
Most Americans don't have a will. Here's why you should.
Fewer Americans have a will in 2025 compared to previous years, according to survey data from Caring. Estate planning attorney Laura Cowan sits down with Brad Smith on Wealth to discuss the benefits of making a will. Cowan also highlights some common estate planning mistakes and how to avoid them. To watch more expert insights and analysis on the latest market action, check out more Wealth here. According to Caring's 2025 Wills and Estate Planning study, the number of Americans with a will is on the decline, from 33% in 2022 to just 24% in 2025. When asked why, over 30% claim they don't have enough assets to pass down. But even if you're not a millionaire or billionaire, you don't want to be caught without a plan here. And here with some advice, we've got Laura Cohen, who is the estate planning attorney, attorney and founder of Two Hour Lifestyle Lawyer and the author of the new playbook and book Lifestyle lawyer Resolution. Great to have you here in studio with us, Laura. We got to know, what can the average American learn about estate planning from an individual, say like Warren Buffett? Yeah, so, uh, Warren Buffett has recently updated his estate plan, is my understanding, and I think that this is a really good way to illustrate to people, um, that estate planning is not something you just do once, right? It's something you get in place, hopefully when you're younger and you're just starting a family or you're buying your first home, but then your life is going to change, the laws going to change, your assets are going to change. All of these things are going to change over time. So do what Warren Buffett is doing, right? Update it continuously. I believe he's in his 90s and he's still tweaking. Yeah. And so with that in mind, and some of the good things that we've been able to take away from how Warren Buffett is navigating his own estate planning, much larger scale than many of us, but on the other side of that, you have some, some horror stories, unfortunately. What are some of the mistakes, we should classify them as, that you see people make? Yeah, some of the big mistakes that we see, number one, thinking you don't need an estate plan. Right? And this is the number one that we hear, the number one thing that we hear. I don't have enough money for an estate plan. And the thing that I would love to get across is that, you know, estate planning really benefits everyone. Uh, this is why I think people struggle to write the check because they don't understand, well, what am I getting? Um, but it benefits everyone, whether you're nominating guardians for your children, or you're saving on estate taxes, or you're just ensuring that your family's, um, privacy is kept intact after you pass away. There's a lot of problems that estate planning solves, and a lawyer can help with that. You actually recommend that people avoid AI generated or online wills. Why, why is that? I do recommend that they avoid it, and I think there's a lot of reasons. Number one, it may not be, um, done properly, right? We're looking at the outcome here. We're not just looking at, well, does this document look legal and official, right? The legal language matters. Um, how it's executed and signed matters, or else the court's not going to accept it. So, um, the legal language may not be what you want, it may not be executed properly. And the last thing I'd like to say as well, is that this is really something, um, it's a lifelong endeavor, right? So this is the kind of thing that you want to be forming a relationship with an attorney over your life, kind of like how you go to the dentist every year, you go to the doctor, you want to see your lawyer every year. What's changed? Maybe it's just the laws that have changed. Certainly. Right? And if those have changed, you're going to need to get new documents, maybe. And so how have we seen different generations look across will generation differently and making sure that, as one of our guests put it earlier this week, when you step out of life, that everything is ready to be passed on correctly. What we're seeing is, for a long time, the will was the main document. And that's what everyone's heard of. I need to have a will. Um, a will is great. It doesn't do everything. It doesn't solve a lot of the problems that people think, I think are solved by a will. So a better idea might be a living trust, and this is just going to depend on you and your family and your assets. Um, but a living trust solves all the same problems as a will, while also avoiding probate court, um, maybe avoiding taxes. There's some different things that you can do. Laura, thanks so much for joining us in studio, breaking this down. Thank you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-05-2025
- Business
- Yahoo
Most Americans don't have a will. Here's why you should.
Fewer Americans have a will in 2025 compared to previous years, according to survey data from Caring. Estate planning attorney Laura Cowan sits down with Brad Smith on Wealth to discuss the benefits of making a will. Cowan also highlights some common estate planning mistakes and how to avoid them. To watch more expert insights and analysis on the latest market action, check out more Wealth here. Sign in to access your portfolio
