In the United States, you are not able to disinherit your spouse unless your spouse has agreed to it in a prenuptial agreement or a postnuptial agreement. However, in every state, except for Louisiana, you are able to disinherit your children under some circumstances.
Louisiana law states that you are not able to disinherit a child that is under 23 year old, or any children no matter how old that are permanently unable to take care of themselves or manage their finances at the time of the decedent’s death, due to a physical infirmity or mental incapacity.
Movies and television shows have glorified the notion of disinheritance. A child under threat of, or having been cut off from their inheritance is a common plot used in entertainment. However, in real life, the act of disinheriting a loved one should be taken extremely seriously and thought about carefully.
Disinheritance is a financial and emotional decision. It could start when a grandparent or parent decides to end financial support to an adult child or grandchild. It could also be caused by a child or grandchild receiving a lifetime of financial support which caused a disadvantage to others.
There are a few things to consider when deciding to disinherit a child or relative:
- A trust can be used to control the inheritance.
If the reason you are considering disinheriting your child or loved one is because you believe they will spend all of your money quickly or will decide not to work anymore, you can leave them an inheritance that comes with requirements. This can be done by creating a lifetime trust for the benefit of the heir and then provide the trustee instructions on when and how the heir can receive distributions. These requirements could include not using drugs and alcohol, graduating from college, or working a full-time job. However, these requirements cannot include requirements that are against public policy, for instance, practicing a religion or divorcing their spouse.
- If you choose to disinherit your child or relative, you can give your child, spouse, or another relative a power of appointment.
By giving someone the power of appointment, you are allowing them to “re-inherit” the person you chose to disinherit. You would need to give the beneficiary of the lifetime trust a power of appointment that can be used for the process of re-inheriting the person you had chosen to disinherit.
- Make it clear in your will or trust that you will be disinheriting someone.
It could make sense to some to completely leave out someone from your will if you choose to disinherit them, however, you should specifically state in your will that you are disinheriting them. By having it written out clearly, it will discourage a will contest.
- Make sure to be aware of your beneficiary designations and to update them if it is needed.
Since disinheriting someone is often an emotional decision, the beneficiary designation for IRAs and 401(k)s are often overlooked. If you end up deciding to disinherit your child or relative, it is important to ensure your assets are properly titled and your beneficiary designations are updated.