Disinheriting a child or family member from an estate plan can be an emotionally difficult decision for many individuals. The thought of leaving out a problematic family member can be upsetting, leading many clients to reconsider their decision. While some clients may include a troubled beneficiary in their estate plan in hopes of discouraging legal challenges and maintaining peace within the family, this approach may not always be effective. In these cases, clients need to carefully weigh the potential consequences before making a decision.
No contest clauses, also known as in terrorem clauses, have become a common provision in estate planning documents to deter beneficiaries from challenging the terms of the plan. These clauses typically allow beneficiaries to either accept the gifts outlined in the plan or contest the document, with the risk of forfeiting their share if the challenge is unsuccessful. However, it’s important to note that these clauses only apply to beneficiaries named in the document and do not extend to those who have been disinherited. While including a troubled family member as a beneficiary may seem like a protective measure, it can sometimes backfire and lead to further complications.
In situations where a problematic family member is included as a beneficiary but given a minimal share or trivial bequest, there may still be ways for that individual to access information about the estate. Beneficiaries are typically entitled to receive a copy of the trust agreement or will, as well as details on the assets and expenses of the estate. Even if the trustee or executor attempts to redact certain information, a determined beneficiary can seek court intervention to obtain more details. This can result in a contentious and complex administration process, even if an in terrorem clause was included in the estate plan.
While in terrorem clauses are generally recommended in estate planning, it’s crucial for clients to consider the potential consequences of including or disinheriting a troubled family member. If a client decides to include the problematic family member in the plan, it’s important to ensure that their beneficial interest is not too trivial to prevent unintended consequences that could render the forfeiture clause ineffective. Ultimately, clients should carefully evaluate their options and seek guidance from estate planning professionals to make informed decisions that align with their unique circumstances and goals.
In many states, clients have the option of including forfeiture clauses in their estate planning documents. These clauses, also known as in terrorem clauses, are designed to discourage beneficiaries from contesting the terms of the plan and can lead to a smoother probate process by reducing the likelihood of disputes. However, including a troubled family member as a beneficiary may not always be the most effective strategy, as it can potentially expose the estate to new challenges and complications. Clients should weigh the benefits and drawbacks of each option before making a decision.
In conclusion, the decision to include or disinherit a problematic family member in an estate plan is a complex one that requires careful consideration of the potential implications. While in terrorem clauses can serve as a useful tool in preventing legal challenges, clients must be cautious about how they approach including troubled beneficiaries in their plans. By seeking guidance from estate planning professionals and carefully evaluating their options, clients can make informed decisions that align with their intentions and goals for their estate.
