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What does it mean to disinherit someone and what are the implications and advantages?

In the realm of estate planning, disinheriting refers to the deliberate act of barring certain individuals from receiving any part of your estate upon your demise. This intentional exclusion is typically executed by clearly stating in a living trust or will that the particular person shall not be a beneficiary of your estate.

Disinheriting someone may seem harsh at first glance, but there are instances where this strategy could be a practical and necessary part of estate planning. Here’s what you need to know about this process and some potential benefits it may offer:

Control Over Estate Distribution:

One of the main reasons individuals choose to disinherit someone is to maintain greater control over how their assets are distributed after their death. A well-structured living trust can ensure that your assets are divided according to your exact wishes and that those who you feel are undeserving or incapable of managing the inheritance responsibly are excluded.

Protection of Assets:

If you have concerns about potential misuse of your assets, disinheriting a person may be a feasible option. For example, if a potential heir has a history of irresponsible financial behavior or substance abuse, you may choose to disinherit them to prevent your hard-earned assets from being squandered.

Incentivize Positive Behavior:

Sometimes, disinheriting can act as an incentive for certain beneficiaries to change harmful behaviors or patterns. For instance, a parent may decide to disinherit an adult child with the understanding that they could be reinstated as a beneficiary if they demonstrate responsible behavior over a specified period.

Prevent Legal Disputes:

By explicitly stating in your living trust that certain individuals are disinherited, you reduce the risk of legal disputes over your estate after your passing. Clear declarations within your living trust document can prevent lengthy and costly court battles that could potentially drain the resources of your estate.

Aid for More Deserving Causes:

You may prefer to divert assets to more deserving recipients, such as grandchildren, charities, educational institutions, or other causes you deeply care about. Disinheriting an individual may allow you to channel your resources to create a lasting legacy that aligns with your values and convictions.

Disinheriting someone isn’t a decision to be taken lightly, and it’s essential to consider the potential emotional fallout and legal implications. An experienced estate planning attorney can guide you through the process, helping you understand all your options and create a living trust that best reflects your wishes and intentions.

At Dynasty Living Trusts we have built the ability to Disinherit beneficiaries directly into the platforms workflow, making it easy to manage.

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What is a Trust?

A Living Trust is a financial tool that lets you plan, organize, and protect your life. It’s a personal entity that allows you to add assets and plan out your inheritance. Eliminating legal battles, cost, and time spent by your loved ones. 

Think of it like a personal LLC that you put everything you own in. Except it doesn’t protect you from liability like an LLC does, it protects you from probate and conservatorship. 

Probate is the complicated court process (12-18 months) where a judge decides what happens to your assets after you die, become incapacitated, or are “deemed” incapable. Creating a living trust allows your assets to completely circumvent probate and immediately transfer to your loved ones. 

In addition to being able to name heirs (your beneficiaries), a Trust also allows you to assign someone to manage it (your successor trustee). Instead of going through probate, your Successor Trustee takes control of the Trust, handles your affairs, and distributes your assets according to your instructions. The person you select as Successor Trustee should be your most trusted person. Like a best friend or closest family member.

At Dynasty, we believe everyone should have a Living Trust. If you have children, assets, or plan to acquire assets in the future, you should create a Trust. That way when you buy your next home, open a bank or brokerage account, get startup shares, etc. – you can immediately title them in your trust.