From The Finger Lakes Times
There is a longstanding line of thinking that has persisted for as long as anyone remembers in estate planning law that you should disinherit someone by leaving that person $1. The theory goes that this stops them from contesting your will because they have not been disinherited; they have been left a monetary gift.
Many attorneys and clients, to this day, adhere to this principle and have not given much thought to the background or why or how this would work mechanically. The truth is, this old tactic is not based on sound law, it’s unnecessary, and it may cause problems for the estate in the long run.
There is an estate planning rule in New York that if you add what’s known as a no-contest clause to your will, and someone later contests your will, then that person loses their inheritance. By leaving someone money, the goal is to dissuade them from contesting the will because under the no-contest rule, they would lose out on any money you left them.
Additionally, the theory goes that there is an argument that if you specifically leave someone out of your will, say an adult child, while leaving gifts to the rest of your children, that this opens the door for the disinherited child to challenge the will and question your mental capacity at the time you executed the document. They could argue that you must have forgotten they existed and, therefore, by leaving them $1 instead of not mentioning them at all, this shows you contemplated them at the time you executed your will.
The faulty logic
Anyone can contest your will, regardless of whether you disinherit that person or leave them something. However, leaving someone $1 and adding a no-contest clause means that taken together, the only thing that person has to lose is $1. That isn’t going to dissuade anyone from challenging your will if they intend to do so. It is simply an ineffective planning approach.
By leaving someone $1 you also create unnecessary work for the estate, and potentially bring someone into the estate who otherwise may not be involved at all.
You may inadvertently include someone who otherwise would not have any inheritance rights or otherwise receive notice of your death or your estate. This person now may cause problems for your estate, and frankly may have motivation to do so after finding they are receiving the insulting sum of $1. You also open the door for an argument that you intended to leave this person more than $1 and that it must be a typo given how small the gift is.https://82aae90f03c7e17e80ddd8475bb6aaa0.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
Lastly, for someone to formally receive his or her $1, they will need to be notified and a check will need to be drawn up and sent to that person. Your executor or administrator will have to wait to receive a receipt and release from this person, or explain to the court why none was received, and this can hold up closing the estate. Additionally, all of this work will add time and expense to the estate.
How to properly disinherit someoneIt is best to make a definitive statement that you are specifically and intentionally making no provision for a person or a statement that you are disinheriting them. Such a statement clearly shows you remembered the individual (they can’t argue you meant to leave them something and just forgot), and also show that you unequivocally intended for them not to be included in your estate.
While that person can still contest, such a clear statement will make any litigation more difficult to win, especially if you state why they are disinherited (i.e. if you state you have provided for them during your life). In this manner, with a properly drafted and executed will, and clearly stating in your will that you make no provision at all for a certain individual, you can create an estate plan that should withstand any future scrutiny.
A no-contest provision can be a powerful method of dissuasion, if the person was left enough to make them think twice about contesting the will. The issue with this approach is that it requires you to leave something to the person you believe may contest the will, and of such value that they won’t want to risk losing it by challenging the will.https://82aae90f03c7e17e80ddd8475bb6aaa0.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
You can never fully prevent someone from contesting your will, but you can mitigate the chances of it happening by discussing your wishes with your family and having a properly drafted estate plan.
David J. Whitcomb, Esq., owns Whitcomb Law Firm P.C., with locations in Canandaigua and Geneva. Contact him at email@example.com with questions.