PLANNING AHEAD: A few considerations before deciding to disinherit a child [Column]

Frequently, wills drafted for husband and wife with surviving children designate assets to flow from husband to wife if husband dies first and from wife to husband if wife dies first. Then, when the parents have both passed, assets would be distributed equally to their children.

This testamentary plan works in most cases especially with stable families. Parents, since family relationships are not always the same, might consider modifying the common pattern and there are some issues they might reflect upon before doing this. Here are some frequent examples I have seen as an elder law attorney and when and why they might work or not.

• Parents believe an adult child or grandchild is well provided for. Mom and Dad have followed the successes of their adult son and believe he does not need to inherit more from them. One or more of the remaining adult children is struggling. Parents might also consider whether there would be inherited wealth from their wealthier son’s in-laws. If the issue is unequal distribution of wealth among adult children it might be best to discuss this first with that child before making the decision through designation in the wills. Sometimes an adult child is more than willing to recognize an uneven distribution. In other cases, not so much.

Remember, once you are gone there is no way to discuss your motivations. Many adult children believe, rightly or wrongly, that the relative size of an inheritance reflects who their parents loved most. When drafting your documents you have an opportunity to share your thoughts. Notably, most parents, in the end, decide on an even distribution regardless.

• Parents and an adult child are estranged. Far more common is the circumstance where an adult child is estranged from her parent or even from the family overall. It might be tempting in this case to cut him or her out of the will.  This is usually discouraged. There may be temptation for the “disfavored” child to institute legal action to challenge the will claiming that other children exerted “undue influence.” Although this contest rarely actually happens and even much more rarely is successful, there still can be hard feelings that last for years.

There are exceptions and individual circumstances matter. The estrangement might be so deep and long lasting the disinheritance is expected. To assure the omission is intended and not an oversight a parent might state in the will that he/she recognizes he has another child and has decided not to provide for him/her through this will.  Do not do what I once saw. The now deceased individual left some relatives $1.00, a figure so low it did not justify the postage for statutory notice and aggravated beneficiaries.

• Parents who have a special needs or disabled child and are concerned that an inheritance would cause their child to lose benefits. Special needs cases are difficult, one reason being that it can be challenging to determine which benefits would be affected by an inheritance and another being the complexity involved in drafting trusts to protect both adult and minor children where benefits could be endangered. It is important to note that not all inheritances cause disabled persons to lose government-supported benefits. Persons receiving Social Security disability benefits by reason of their prior work history before disability and persons receiving Social Security disability benefits by reason of a parent’s work history where the parent is retired or deceased, and the child is not on Medicaid, SSI, or some similar programs are typically not in danger of losing benefits due to receiving an inheritance. Social Security disability beneficiaries can inherit. They simply cannot “engage in substantial gainful employment.”

On the other hand, persons on SSI (Supplemental Security Income) and some other programs can see their benefits affected by inheritance. It is important to know what programs are involved.

One disfavored tactic sometimes used by parents who are concerned that an inheritance to a disabled child would cause the child to lose benefits is to leave that child’s share to another family member with the belief that the favored family member will “take care of” the disabled child. Even with the best of intentions the person receiving the inheritance could deposit the funds to a joint account with a spouse, spend the funds when in distress, or lose funds to creditors.

When in doubt, seek help from an elder law or estates attorney who is familiar with the alternatives.

Janet Colliton, Esq. is a Certified Elder Law Attorney through the National Elder Law Foundation. Her office, Colliton Elder Law Associates, PC practices elder law, special needs, real estate and estate planning and estate administration, with offices at 790 East Market St., Ste. 250, West Chester, 610-436-6674, [email protected] She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services LLC, a service for families with long term care needs.

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