What can you do when you need to disinherit a beneficiary?

by | Dec 16, 2020 | Estate Planning |

No one hopes to disinherit a beneficiary named in their will or trust. Yet, relationships change over time, and you may now find yourself estranged from one of your beneficiaries. Or, the beneficiary in question might have endured personal hardships that could make it difficult for them to handle their inheritance. Before you disinherit them, though, you must understand the appropriate way to do so.

Disinheriting a beneficiary named in your will

To disinherit a beneficiary named in your will, you will need to amend or rewrite it to include a clause that documents their exclusion. You must be careful about the language you use, and you will want to review it with an estate planning attorney to make sure it is enforceable.

Before you disinherit a beneficiary, you must understand who you can exclude from your will. While you can disinherit your children, they have the right to challenge their exclusion. Furthermore, you cannot entirely disinherit your spouse. Even if you include a provision in your will that leaves them nothing, they will still receive an elective share of your estate. Under New York law, this is one-third of its value if you have children and one-half of its value if you do not.

Keep in mind that your will becomes public record after it passes through probate. Anyone who wants to review its terms can do so at the proper probate court – including the beneficiary you plan to disinherit. If they decide to view your will and notice their exclusion, they may try to contest it.

Disinheriting a beneficiary named in your trust

You will encounter fewer challenges when disinheriting a beneficiary named in your trust than one named in your will. This has to do with the privacy that trusts offer. Unlike wills, trusts do not become public record. Only your trustee and your beneficiaries will be privy to its terms upon your death. When you remove a beneficiary from your trust, then, they will not be notified of your action.

Besides your will or trust, you will want to make sure that the beneficiary you plan to disinherit is not set to receive any retirement accounts, bank accounts or life insurance policies you have. If you designated them as the beneficiary to these, you will want to amend your accounts’ titles and name a new beneficiary.

Deciding to disinherit a beneficiary can be a difficult choice to make. If you are unsure whether it is necessary to do so in your situation, an attorney can help you understand if it is appropriate and how to proceed.