Sandra Reed’s Life Care Planning: Inheritance planning for the ‘dysfunctional’ family

Attorney Sandra W. Reed answers your life planning questions.

Attorney Sandra W. Reed answers

your life planning questions.

The Definition of “Family” Is “Dysfunctional”

A friend, asked if he thought his family had been dysfunctional when he was growing up, shrugged and declared, “Isn’t the definition of family dysfunctional?” Maybe we wouldn’t all go that far, but the family without issues is rare, indeed, and those issues often impact decisions on how worldly goods are bestowed at death.

Freedom to Favor One Over Another

Clients will ask attorneys if they are required in their wills to leave property to all their children. The clear answer is “no.” Each person can choose to leave property to virtually any person or entity to the exclusion of any or all children or leave more property to one child and less to another.

Limitations on Disposition of Property at Death

There are some limitations on what property an individual can dispose of at death.  The family homestead must be made available to the surviving spouse or minor children. And a married person cannot give away either the spouse’s separate property or the spouse’s interest in the community property.

A person who has a pension plan subject to federal ERISA laws must have consent of the spouse to make anyone other than the spouse a beneficiary of the plan benefits.

Blended Families

Although individuals may leave their property to whomever they choose, it is prudent to consider the effects of decisions on family members. Do the math from a divorce rate that ends 50 percent of marriages, with additional marriages ending in death of one spouse, followed by a generous number of remarriages. The sum is an extraordinary number of blended families.

Individuals with blended families need to consider the sensitivities of children and step-children regarding who is included in or excluded from inheritance by a parent or step-parent. Some approach the making of a will with a clear understanding of any tensions between family members. Others may be blindsided by resentments or hard feelings of which they are not aware.

 Family Members Who Don’t Like Each Other    

In families in which members are at odds with each other, how Mom and Dad divide the estate can frequently cause smoldering issues to rise to the surface. Families faced with these contentions need to approach dispensing of their assets with caution and care to reduce the chance of disputes that could lead to expensive legal conflicts that could drain their estates. As Mark Twain once said, “You never really know someone until you share an inheritance with them.”

Estranged Children

Many families planning for inheritance confront the problem of an estranged child. There may have been a divorce and one parent resents that the child sided with the other parent. A child may have left the family and disappeared. The child may have made false allegations against the parent. Whatever the reason for the disconnection, the painful decision to include or exclude an estranged child must be addressed.

In these circumstances, a parent’s decision to favor the remaining child or children over the estranged child may cause tension. On the other hand, including the estranged child may raise resentments in the rest of the family members.

Disabled or Special Needs Children

It is often desirable to set up a trust to manage an inheritance to a disabled or special needs child. In addition, the existence of a child who has mental or physical disabilities that prevent the child from being self-supporting presents the issue of whether this child should be favored in inheritance over other children who can provide for themselves.

On the other hand, a parent with a child whose health conditions are so severe that the child is not likely to live very long may decide to favor the healthy child or children over the afflicted child, especially if resources from insurance or liability settlements can provide for the afflicted child’s needs.

Lifestyle Issues

A parent whose child has abandoned his or her own children or who is financially irresponsible may want to disinherit that child in favor of the grandchildren.  Sometimes the decision to do so can have salutary effects. For instance, the prodigal child is initially angry but realizes years later that the absence of inherited resources presented the impetus for a lifestyle turnaround. Or the wayward child learns of the parent’s decision before the parent’s death and mends his or her ways.  In that case, the estate plan can be revised if desired.

Children in Toxic Relationships

It is against public policy to condition inheritance on a child’s divorcing his or her spouse or on marrying a person of a certain religion. Therefore, a provision in a will that contains one of these conditions will likely fall under scrutiny by the probate court. However, a parent who has a child involved in a toxic relationship can consider making the bequest through a trust that prevents the child’s partner from gaining any control over the property.

Family Conflicts Over Religious Affiliation

Parents sometimes threaten to disinherit a child who has rejected the family’s religious affiliation, either by abandoning religion altogether or by converting to another religion. Disinheritance may be a misguided attempt to force the child to conform to the parent’s religious choice and often results in animosity toward the parent and the religion. Similar results can occur when a parent attempts this tactic with a child who has chosen a lifestyle that conflicts with the parent’s religious beliefs.  

Whatever the issues, the prudent parent should seek the counsel of an elder law attorney whose skills can help anticipate problems and reach solutions to avoid the financial and emotional cost of litigation from family members against the estate.

Sandra W. Reed is an attorney practicing in Glen Rose.  She is of counsel with the elder law firm of Katten & Benson in Fort Worth.  If you have any questions, you may contact her by phone at 254-797-0211 or by email at swreed2@yahoo.com

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