How do I disinherit my sibling?

Family relationships are complicated. Siblings who have grown apart frequently feel closer to their associates than their immediate family members. In that event many people might consider leaving an estate that would otherwise go to their siblings to their friends, favorite charities, or other good causes. But no matter how close or distant siblings are during life, at death many siblings are surprised to find out that they were disinherited. Surprise turns to anger and anger turns to legal counsel. In too many cases, the disgruntled sibling sues to try to invalidate the deceased sibling's estate plan.

Here are some tips to consider when drafting an estate plan that disinherits your sibling.

Make the disinheritance clear.

If you intend to use a will or trust to disinherit anyone in your family, or you do not plan to leave any give to someone who might be expecting one, it is best practice to include a term declaring that intent. An appropriate terms might say, "This trust intentionally does not provide for the following people: Adam Graysby, my brother."

Your reasoning is not necessary but a short explanation might help your successor trustee explain to the distraught would-have-been beneficiary.

In some situations, in particular omitted children and spouses, an explicit statement of intent is necessary to effectively disinherit someone. But the applicable rules are technical and you should consult and attorney in this situation.

Add a "No Contest" clause.

A common provision in many trusts is a "no contest" clause. A no-contest clause might state something like: "If any beneficiary contests this trust or any of its provisions, they shall forfeit their share and receive nothing from the trust." A no contest clause discourages beneficiaries from contesting or challenging the terms of the trust by forfeiting any inheritance they are entitled to upon initiating the contest. The primary purpose of this clause is to prevent legal disputes or challenges that could delay or disrupt the distribution of the trust’s assets.

The term "no contest" clause is a bit of a misnomer. A no contest clause does not mean that a sibling cannot bring a lawsuit to contest the trust, it only means that, if a sibling does contest the validity of the trust, any gift they are entitled to may be stripped.

Adding a no contest clause to your trust could discourage a disinherited sibling to from challenging the trust, but only if they are left some kind of nominal gift. If, for example, the trust states that the sibling will be disinherited, except with respect to $50,000, the sibling might not want to go through the expense and risk of hiring a lawyer to file a claim against the trust, when they could just accept the "nominal" gift. Of course, what is "nominal" will vary across estates. Although a substantial estate could make a gift to a disinherited sibling that would deter unjustified legal action, more modest estate's might not have that option.

Without some nominal gift, the no contest clause has no teeth. A disinherited sibling does not take any additional risk by challenging the trust. If someone tries to enforce the no contest clause against them, there will be no actual consequence.

Nevertheless, estates that can afford to make some kind of a 'nominal' gift may be well served by the insurance.

Cut off any arguments about your mental health and decision making.

Scorned heirs frequently turn to two types of claims to try to invalidate estate planning documents that leave them out: mental incapacity and undue influence. Lawsuits on either basis are cheap to file and use as cudgels, wrapping the estate up in legal filings and court appearances for years.

To head off claims of mental incapacity, consider having your primary care physician issue a letter just before singing your trust confirming that, in their opinion, you have proper capacity to make your own decisions. Have a copy of your letter kept with your estate plan and with your attorney.

To head off claims of undue influence, consider having your estate plan written by an experience estate planning attorney. An attorney should make appointments with you directly and receive all direction and payment from you. The attorney's notes and testimony can go to show that no one else make making you establish your estate plan, and that your plan reflects your independent wishes.

With respect to both mental incapacity and undue influence, you might consider having the signing of your estate plan videotaped. A videotape goes above and beyond a notarization in showing that you both are the person who signed the documents and that you were in your correct mind at the time.

Pick an effective successor trustee.

Especially where a disgruntled sibling may attempt to challenge the validity of a trust, it is critical to choose a competent trustee who knows how to hold their ground. Even where trust terms are clear and obvious, successor trustees can be rattled by accusations from angry family members. Especially for trustees with no previous experience hiring an attorney or fighting a lawsuit, the task can be daunting.

If no one in your life is well suited to take on the role of challenging your disgruntled siblings, then you might consider appointing a professional fiduciary as your successor trustee. A new and growing industry, professional fiduciary's step in after you pass to handle all estate administration matters without your friends or family having to worry about administrative logistics. A professional fiduciary can be advantageous because they are familiar with all the usual trust administration tasks and can complete them quickly and efficiently. In the event of litigation, they will have contacts with local attorneys and experience with how to succeed against contests and other issues with heirs and beneficiaries. On the other hand, professional fiduciaries can be quite expensive, charging either a fraction of the value of the estate or an hourly rate that can be similar to an attorney.