I Do Not Want to Disinherit My Child but He May Use Funds for Illegal Activities?Share this post
Disinheritance is often the driving force in movies and television shows. Should you consider disinheriting a child or grandchild in real life. It should be approached very carefully. It’s both an emotional and a financial decision and it can have significant ramifications, such as prompting a will contest and having your wishes overruled by a court. You could disinherit that child if that is what you wish to do. However, you have other options.
You can create a living trust to control an heir’s inheritance if your concern is that your child will blow their inheritance irresponsibility, maybe on fast cars, drugs, alcohol, or extravagant trips. The trustee can transfer funds in small increments rather than giving the entire inheritance at once, or pay bills directly on your child’s behalf.
This can be accomplished by setting up a lifetime trust for the heir’s benefit and giving the trustee specific instructions as to how and when distributions can be made. You can include incentives such as going to college, working a full-time job, or staying drug and alcohol-free.
You can’t include incentives that would be against public policy, however, such as marrying or divorcing a certain individual, or practicing or not practicing a specific religion.
One option is a “special needs” trust. The trustee evaluates the needs of that child, and can do things such as:
- make sure the child has medical insurance in place
- provide food or shelter for that child
- provide distributions based on drug testing
- provide for the costs of rehabilitation or counseling
- disinherit at a later date, if the child doesn’t change his behavior
Through a trust you can control when and how that child receives money through careful planning and clear instructions.
If You Do Not Want to Disinherit, Give Someone Else Power of Appointment
You can also give the trustee of a lifetime trust the ability to “re-inherit” your child. This can be accomplished by giving the trustee a power of appointment that can be exercised in favor of “re-inheriting” the person you’ve disinherited.
Should I Disinherit Your Child, Make Your Intentions Clear
Make your intentions of disinheritance clear if you decide to disinherit your child in your last will and testament. Don’t simply fail to mention them. Specifically state your intent to disinherit. Seeing it in black and white will certainly drive the point home and it might even discourage a will contest that’s based on grounds that the disinheritance was accidental or an oversight.