If you’re a parent who is considering removing an adult child from your will, you’re not alone. Many parents consider disinheriting a child for a variety of reasons – many of which they think are for their own good.
If an adult child has fallen into addiction to drugs or alcohol, it’s normal to be concerned that inheriting even a small amount of money will only allow them to better afford their addiction.
Maybe an adult child has proven to be irresponsible with money or unmotivated to become self-supporting. It can be difficult to think about what would happen if they received an inheritance. The same is true if they’ve married someone you dislike and/or distrust, and you don’t want them to end up with any of your family’s money in a divorce.
Sometimes parents disinherit a child because they’ve become estranged, and their differences seem irreconcilable. Whatever the reason you’re considering disinheriting a child, it’s important to know that the decision is irreversible once you pass away, and the circumstances (or your feelings about them) may have changed by then.
Conditional trusts
There are multiple types of trusts where you can place a child’s inheritance that won’t allow them direct access to the assets. With a conditional trust, you can specify conditions under which a beneficiary receives the assets.
You can require that the money only be spent on specific expenses, like college or job training. You can specify how much a child can receive periodically. It’s crucial to appoint a responsible trustee who will enforce the conditions of the trust.
Asset protection trusts
If you’re concerned about part of your child’s inheritance being lost in divorce or going to pay off creditors or lawsuits, you can establish a trust that will shield the assets from third parties because, technically, the money doesn’t belong to your child, and they have no direct control over it.
Whatever you decide to do – even if you decide to leave them out of your estate plan completely — it’s important to talk with your child or communicate with them in some way so they know that this was your intention and why. It’s also important to make sure your estate administrators (like your executor and any relevant trustees) understand your intentions as well. With experienced estate planning guidance, you can make the best decision for your child and for your estate.