For many families, estate planning is simple and straightforward, offering comfort in the ability to leave something to beloved loved ones. However, in some cases, making decisions regarding distribution of property upon death is neither easy nor comfortable. Perhaps one of the most difficult, and increasingly common, estate planning questions involves the inclusion or disinheritance of an estranged child.
A child may be estranged for a number of reasons. The child may struggle with addictions that have caused difficulty for parents. Perhaps the child has made a series of poor choices or the parents do not like the child’s spouse or partner. In some cases, a parent has no idea why the relationship has deteriorated, but knows only that the child refuses to allow involvement from the parents.
Although the specific reason for the estrangement may not feel important, it will directly affect the intention of planning and how property may or may not be ultimately distributed to that child.
For example, if the estrangement is due to an addiction problem, a parent still may want to provide resources for care needs, but limit the ability of the child to access funds directly. However, if a child has no care needs, but simply has decided to forego a relationship with the parent, a parent may choose to completely disinherit the child.
There are three options for dealing with estranged children in an estate plan.
First, parents simply may leave an outright gift, whether equal or unequal. This option is primarily used for families who are not totally estranged, but have a strained or distant relationship. Estranged children still will be entitled to an inheritance, but it may be smaller in comparison to children who have remained close to parents.
Second, parents may leave an inheritance for their child in a testamentary trust. This simply means that a parent’s last will and testament designates the child’s inheritance to remain in a restricted trust fund with another person handling the distribution of the funds over time.
This option works best for parents who desire to provide for the child, but who are uncomfortable with the child’s lifestyle choices or choice of spouse or partner. Leaving assets in trust ensures that needs will be met without giving control directly to the child. This method also can be used to prevent inherited assets from becoming part of the beneficiary’s estate and potentially lost to influential friends, addictions or divorce.
Third, a parent can choose to disinherit a child. When disinheriting, the child will be entitled to no part of the parent’s estate. Disinheritance language should be clear in the will. The parent should specify whether the child’s descendants also will be disinherited or whether the child alone will be removed. If the child alone is removed, his or her children often inherit the child’s share as if the child had predeceased the parent.
When leaving an inheritance that is left in an unexpected way, the parent should leave a letter explaining his or her intentions to the child. Even estranged children can be shocked and hurt, and without an explanation, the child’s assumptions will not be to the parent’s benefit.
Making decisions for the ultimate distribution of property after death can be complicated and painful, especially for families with difficult relationships. By carefully considering the intention of each distribution, parents can ensure their property is passed in a way that best reflects their goals.