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Disinheritance

 

 

Mathew Perry passed recently, and he had a very specific clause around the disinheritance of children in his Will.  While reviewing this subject we probed into the frequency of this happening and why someone might decide to disinherit a child. 

 

Frequency of Contested Wills: Studies and surveys suggest that approximately 1-3% of all Wills are contested in court. However, when a Will includes a disinheritance, especially of a close family member like a child, the likelihood of a contest increases substantially due to the emotional and financial stakes involved.

Impact of Disinheritance: When a Will includes the disinheritance of a close family member, the probability of a contest can be significantly higher than the general average. Some legal experts suggest that the likelihood of a contest in such cases can be as high as 10-30%. This increase is due to the strong emotional reactions and potential financial motivations of the disinherited party.

Disinheriting children, especially when it comes to substantial Estates, can be motivated by a variety of personal, relational, and strategic reasons. Here are some common reasons why people might choose to disinherit their children:

Strained Relationships: A common reason for disinheritance is a strained or estranged relationship between the parent and the child. This could be due to ongoing conflicts, disagreements, or a complete breakdown in communication.

Lifestyle Choices: Parents might disapprove of their children’s lifestyle choices, such as substance abuse, criminal behaviour, or other actions they consider irresponsible or harmful. Disinheritance can be a way to express disapproval or to avoid supporting these behaviours financially.

Financial Independence: If a child is financially independent and well-off, parents might feel that their wealth would be better used by other children or beneficiaries who are in greater need of financial support.

Perceived Ingratitude: Some parents might feel that their children are ungrateful or do not appreciate their efforts and sacrifices. Disinheritance can be a response to perceived ingratitude or disrespect.

Support for Other Beneficiaries: Parents might choose to allocate their Estate to other beneficiaries they believe are more deserving or in greater need, such as other family members, friends, charities, or causes they care deeply about.

Unequal Distribution to Address Specific Needs: Parents might disinherit one child to address the specific needs of another, such as a child with a disability who requires more financial support.

Estate Planning Strategy: Disinheritance might be part of a larger Estate planning strategy to minimize taxes or fulfill specific financial goals.

Influence of Third Parties: Sometimes, the influence of a third party, such as a new spouse, can lead to the disinheritance of children from previous relationships. This can be due to a desire to prioritize the new spouse or their children.

Moral or Ethical Beliefs: Some parents might have strong moral or ethical beliefs that they feel their children do not share or uphold. Disinheritance can be a way to enforce these beliefs.

Legal Reasons: In some cases, legal issues such as previous financial assistance or settlements might lead parents to decide that they have already provided sufficiently for a child and thus choose to disinherit them.

Avoidance of Mismanagement: Parents might fear that a child would mismanage the inheritance due to poor financial habits or lack of financial acumen. Disinheriting such a child can be seen as a way to protect the Estate.

 

It’s important to note that disinheritance can have significant emotional and relational consequences. In many jurisdictions, disinheritance must be done explicitly and with clear documentation to avoid potential legal challenges. Consulting with legal and financial advisors is crucial to ensure that the wishes are clearly articulated and legally enforceable. Reach out to Peter if you have further questions about this subject and how to manage it so all parties involved can avoid costly litigation.

 

Check out our previous post on Ensuring Your Furry Family’s Future: Estate Planning for Pet Owners

Ministry of Attorney General Information on Estates, Wills and Trusts

 

Want more information?

Are you interested in a consultation with Peter R. Welsh?
Contact me at Peter@SmartWills.ca
By telephone 416-526-3121
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.

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