You can’t take it with you when you go. But just because you can’t take it with you doesn’t mean that anyone in your family has the right to get their mitts on your money. You have to be careful of course and there might be some kin who really do have a right to some of your assets no matter what you do. But with a little planning you can make sure your dough doesn’t end up in the wrong hands.
Wills And Trusts
We’ve discussed wills and trusts before. These are known as estate planning documents and they tell the world how you want your worldly possessions to be divvyed up after you pass away.
If you don’t set up a proper estate plan the courts and the lawyers get to decide who gets what through an ugly process called probate. It’s expensive and time consuming and you lose all control over everything you’ve worked so hard to accumulate. Needless to say, it makes sense to have your will and/or trust set up before you get your ticket punched.
Is It Enough To Set Up A Will Or Trust to Disinherit People?
Setting up your trust and/or will is a fantastic start but just because you establish these documents doesn’t mean you can necessarily preclude certain people from carving big chunks of your money away from your estate.
Neal’s Note – I’m not an attorney and I can not provide legal advice. Please seek out the advice of a qualified attorney on any and all of these matters. You can use a service like Legalzoom to create your estate documents if you like but that doesn’t mean you can’t consult with a professional. It’s much less expensive to get general advice from a lawyer and then consider actually creating the documents through a self-help service.
First, you have to consider how your assets are titled. If you have an asset that is held in joint tenancy for example, the surviving joint tenants inherit that asset when you die regardless of what is written in your will or trust. So it’s important to understand that how you hold title to your assets supersedes what’s written in your trust or will.
There are also state laws to contend with. These laws dictate how much support children and the spouse are entitled to. You can’t overrule the law with your estate planning documents either.
How You Can Write People Out Of Your Estate
Outside of the limitations I summarized above, you still have some flexibility with respect to who gets what. And the good news is that you can leave lots of people empty handed if you like.
For example, you might decide to disinherit one of your adult children .If you do that it’s still smart to be gentle. If possible talk about it and let the child know beforehand. This might stop them from creating trouble and bringing a lawsuit down the road.
After the niceties are done, it’s time to amend your estate documents. Most lawyers will tell you it’s important to mention the child by name rather than having no mention of them what-so-ever. This way the court knows that you didn’t overlook them by mistake.
To be extra sure, you might want to leave them a token amount. This is even greater proof that you didn’t just forget about them.
After the kids are handled it’s time to think about your parents, siblings, aunts and uncles etc. They don’t have any legal claim to your assets but if you die without naming a beneficiary or if you die after your beneficiary does, the whole clan can duke it in court over your money.
The best way to make sure that doesn’t happen is to check your beneficiaries every 2 years and make sure everything is in order. If there are people who you specifically don’t want to inherit from you, name them.
If you don’t do these two things they might go to court and claim they should inherit your money based on how important they were to you while you were alive. You won’t be around to tell the world what a cheese-head your relative was so make sure not to skip these points.
The last point is to make sure your estate documents specify that you’ve allocated assets to everyone you wanted. Be clear that if someone is left out, they were left out on purpose and you didn’t forget about anyone.
You don’t have complete control over all your assets after you’re gone. But you do have significant power to make sure that the wrong person doesn’t get your money when you are gone. All it takes is being aware of how your assets are titled, understanding how trusts and will work and then being very intentional about your desires.
Is there someone you want to disinherit? What have you done to make sure your wishes will be honored?