Disinheritance is an estate planning technique that removes a child from your estate plan. While a valid planning technique, due to the personal nature of such a decision, care should be taken to ensure that the plan is drafted with precision and with assurance that any potential legal challenges are addressed before they occur.
By Aaron McCarter
Even when there are good reasons for leaving everything to one child, disinherited children will often choose to fight in court. Most people attempt to leave all of their children an equal proportion of their assets. That is not always easy to do. If the majority of assets are tied up in a business, for example, then it may be prudent to leave the business to the child who is active in the business.
Consider, however, if this decision to disinherit is done later in life and there were children or other heirs expecting to be included in the estate plan. The New York Times article, titled “In Inheritance Battle, Judge Sides Against Perelmans,” reported on such a case involving a legal dispute over the estate of billionaire Robert Cohen.
Late in his life Mr. Cohen was sick and changed his estate plan. He had a son and a daughter. It appears that Cohen decided to leave everything to his son, as it was his desire for the son to carry on the business. However, the daughter, who was married to the wealthy chairman of Revlon, claimed that the inheriting son had manipulated Mr. Cohen. A judge in New Jersey decided otherwise and ruled in favor of the son.
With the significant dollars at stake in the Cohen estate, it may not have been possible to prevent a legal fight between the family members. Nevertheless, there were steps that could have been taken to make such a battle less likely. Finding a qualified estate planning attorney who can guide the estate plan and who can also help explain family decisions is a key element of avoiding potential problems and fights after-the-fact.
For more information in Liberty, MO and the Kansas City Area about effective planning and to access free information and tools to organize your estate, visit our elder law and estate planning website.
Reference New York Times (June 25, 2014) “In Inheritance Battle, Judge Sides Against Perelmans