For many families, the thought of excluding a child from receiving an inheritance is a very difficult topic to discuss, yet many parents have children who have created problems within the family or who have distanced themselves from the family for years. Whether the parent has an explanation for their behavior or not, many parents are still eager to see that child receive an inheritance. With many families, the difficult child most likely has not only distanced themselves from the mother and father, but they have distanced themselves from their siblings. Designating the difficult child as a beneficiary of your estate will most likely create problems for your other children. For example, the children that you do have a relationship with and that you do want to inherit your estate will have to now deal with that obstinate child who has removed themselves from the family. Additionally, if you have left that difficult child a percentage as opposed to a dollar amount, your children will have to account to that sibling as to your entire net worth. For example, if you leave the obstinate child that has removed themselves from the family 5%, the Trustee has to provide a full accounting to that child to establish how they arrived at their 5%. In many cases, this opens the door for the obstinate child to dispute every financial decision and question every check written and ultimately cause the estate to incur several thousand of dollars in attorney fees and tie up distribution for years. If your estate plan states that that difficult child is to receive a lump sum of $10,000 then no accounting is required, because $10,000 is $10,000. Additionally, the amount of contact that your Trustee will have with that child is very minimal. Another problem of naming an obstinate child as a beneficiary of your estate is that many family members do not know their address or whereabouts. In many cases, that child does not want to be found and they have made their contact information unknown. Leaving a dollar amount or percentage to that obstinate child now creates another problem for the Trustee in locating that family member. The question then becomes how long do they have to look? How much money do they have to spend and, ultimately, what is the Trustee’s due diligence to give up and pass the money back into the estate? No one wants to think about their children removing themselves from their family or their lives. Many times if they have, you need to consider removing them from your estate plan.
Goudy Bookletter 1911