Clients often approach us about disinheriting family members. As families sometimes drift apart, so does their desire to share their wealth, even after death. Nevertheless, removing a close family member from your estate is a serious issue that requires careful consideration. Disinheriting the natural objects of your bounty – as the law describes close family members meant to inherit your wealth – is risky business. A disinherited family member who would be otherwise in line to inherit your estate has every incentive to fight your will tooth and nail. These prolonged disputes can ultimately frustrate your estate plan altogether as they delay distribution and rack up legal fees charged against your estate. Despite these risks, people may still feel strongly about cutting a relative out of a will.
Cutting a Relative out of a Will
The first approach that comes to mind is simply excluding a relative from your will. For distant relatives that would not stand to inherit anything if you died without a will, this is all that it takes. However, for close relatives that are natural objects of your bounty, like your children, this method is fraught with problems. The omitted child could argue that you simply forgot to include them. Further, New York law automatically writes omitted children into your will if they were born after the will’s execution. EPTL § 5-3.2. Therefore, it is important that the will highlights that an omission of a close relative was intentional and not an oversight.
The One Dollar Bequest
One way of achieving this is including the relative in your will but giving them a dollar. This type of bequest prevents anyone from arguing that you forgot about them. To the contrary, it makes it abundantly clear what you thought of them. However, before you compile a list of your most hated relatives and give each a dollar, consider the potential repercussions. Inheriting a dollar is still an inheritance, giving the recipients all the rights of a distributee. They might have the last laugh as they refuse to cooperate with your estate’s executor or delay cashing the $1 check. Keep in mind that the easiest way to settle an estate is by consent of all persons involved. Therefore, including hostile one-dollar-heirs in this mix is a recipe for disaster.
The Disinheritance Clause
If you wish to disinherit a close relative, just state so in your will. Rather than giving them a dollar, state that you give them nothing. This will generally exclude them, as well as their descendants. You usually do not have to explain why you are disinheriting them, but it can be helpful to do so. For example, if you are excluding someone from your will because you already gave them a lifetime gift in lieu of an inheritance, then the will should reflect this. Easily verifiable, objective statements strengthen your will. On the other hand, you should refrain from making inflammatory statements or accusing people of misconduct. Doing so could raise doubts about the state of your mind, raise inferences of undue influence, and could even lead to claims of defamation against your estate. For that reason, if you hold a grudge against one of your heirs, it is best to inform your attorney while keeping that information out of your will.
The No-Contest Clause
No matter what you do, disinheriting a close relative always invites a costly will contest. A no-contest clause, or in terrorem clause as lawyers aptly call it, can help. An example of a no-contest clause reads as follows:
If any beneficiary under this Will in any manner, directly or indirectly, contestsMatter of Ellis (252 AD2d 118 [2d Dept 1998])
this will or any of its provisions, any share or interest in my estate given to the
contesting beneficiary, or to the beneficiary’s issue, under this will is revoked.
No-Contest Clause Disinherits Litigious Heirs
In essence, a no-contest clause automatically disinherits anyone who seeks to challenge your will. As a result, it discourages people from challenging your will because they risk getting nothing in return. However, for this scheme to work, a no-contest clause has to be supported by a substantial bequest that a person would not want to lose. Therefore, sometimes the safest way to disinherit someone is by not cutting them out of your will entirely. Instead, give them less than they would be entitled to without a will, but enough that they would not want to risk losing it.
A No-Contest Clause Requires a Generous Bequest
At this point, you might wonder why you would give someone anything if you just cannot stand them. Shouldn’t a no-contest clause ensure they get nothing, no matter what they do? This is a common misconception of how this clause works. If someone gets nothing (or very little) to begin with, then they have nothing to lose if they challenge the will. If they succeed, they can throw out your will along with its no-contest clause. As a result, they have everything to gain and nothing to lose.
On the other hand, if you leave them a substantial gift, they might well decide that it is better to remain quiet and accept the gift rather than wager it in an uncertain lawsuit. In effect, a no-contest clause supported by a substantial gift allows you to buy peace for the rest of your family. If you have a hard time imagining giving something of value to a disliked family member, think of it as a gift of peace to everyone else.
The Risk of Using No-Contest Clauses
Another reason to support a no-contest clause with a substantial gift is the shaky legal grounds on which these clauses stand if challenged. Two states, Florida and Indiana, will not enforce them at all. In other states, your mileage may vary. In New York, EPTL § 3-3.5(b) provides for valid no-contest clauses, subject to certain limitations. They are not effective against minors. Moreover, non-frivolous lawsuits alleging forgery or lack of jurisdiction do not trigger the no-contest clause. Likewise, introducing a competing, newer will is also allowed without fear of repercussions. Finally, no-contest clauses still allow heirs to question the construction of your will’s clauses. In other words, while your heirs cannot question the validity of your will in most cases, they can argue over the meaning of your will. This highlights the importance of clear and unambiguous will drafting.
The desire to disinherit a disliked family member is a strong one. However, disinheriting a close relative is an extreme measure which jeopardizes your entire estate plan and may hurt other family members. It invites the disinherited family member to challenge your will through costly and prolonged lawsuits. In the end, the estate might be left with nothing, save for attorney fees. Therefore, sort out any disputes during your lifetime. If that is impossible, a no-contest clause supported by a substantial consolation prize presents a last-resort compromise. Speak to us to ensure your will does not die in a will contest.