You should seriously consider the potential pushback when you are planning your estate if you are thinking about disinheriting a child or someone else that will be expecting an inheritance.
While you are certainly free to make your own decisions in this regard, you can take certain steps to minimize the possibility of an estate contest, and we will look at them here.
Take Action to Establish a Plan
Surveys that are conducted consistently find that most American adults do not have estate plans in place. You never know what the future holds, and people of all ages pass away each and every day, so this is nothing more or less than irresponsible.
When it comes to estate challenges, if your true wishes are not recorded, anyone can claim that they know that you intended to leave them an inheritance. This can lead to a contentious situation that will be sorted out by the probate court.
There is no reason to allow this to happen when you can work with an estate planning attorney from our firm to put a plan in place. Even if you think you may want to make changes later on, you should definitely execute a plan that reflects your current wishes.
Use a Living Trust
The probate court handles intestate estate matters, and the court will also supervise when a simple will is used. With regard to estate challenges, there is a proving of the will during probate, so anyone that wants to contest the will can come forward and make their case before the court.
This built-in mechanism makes it easy for people to lodge estate challenges when a will is utilized as an asset transfer vehicle.
On the other hand, if you state your final wishes in a living trust, the trustee that you name in the document would distribute the assets to the beneficiaries outside of probate. As a result, there would be no pre-existing forum for a challenge.
Someone could file a lawsuit to initiate an estate contest, but this is a complicated and expensive process.
No-Contest Clause
You can include a no-contest clause when you are drawing up your will or living trust. If you go this route, anyone that is named in the document as an inheritor would forfeit their inheritance if they contest the estate.
They can choose to roll the dice and take their chances, but the no-contest clause would serve as a strong disincentive.
While we are on the subject, we should share some cautionary words about total disinheritances. If you leave a child out in the cold, they would have nothing to lose if they contest the estate.
You could leave them a modest inheritance and include a no-contest clause, and this would give them a reason to take pause before they create a firestorm that negatively impacts the family.
Additional Living Trust Benefits
A living trust is a better choice than a simple will for preventing an estate contest as we have stated. This is one benefit, but there are other advantages that are worthwhile even if you have no concerns about an estate challenge.
When you establish this type of trust, you will be the trustee while you are living. As a result, you maintain complete control of the assets on every level. You can change the terms along the way, and you retain the right of revocation. You can dissolve the trust entirely if you ever choose to do so, and it would no longer exist.
You name a successor trustee to assume the role after your passing, and your heirs would be the beneficiaries. When the time comes, the assets will be distributed outside of probate, so time and money will be saved.
In addition, you can include a spendthrift provision. If you do, the trust will become irrevocable after your death, and the beneficiary’s creditors would not be able to reach the assets. You can also set the terms of the distributions, so you do not have to allow for lump sum payouts all at once immediately following your death.
Finally, you can account for possible incapacity when you use a living trust. The successor or another person that you name can be empowered to administer the trust in the event of your incapacitation.
Update Your Plan Regularly
The grounds for estate challenges are undue coercion, fraud, incapacity, and improper execution. With the exception of improper execution, a challenge under any of these grounds would essentially be based on the contention that the document does not reflect your true wishes.
If you create an estate plan forty years before your death and you never look at it again, it could be reasonable to suggest that your thinking evolved over the years.
You can nip this argument in the bud and make sure that your estate plan is always up-to-date if you schedule reviews with your estate planning attorney every year or two. All interested parties will know that you are on top of it, and this will minimize the likelihood of an estate contest.
Attend a Free Webinar
Our attorney Hunter Montgomery will be conducting a seminar in the very near future. The sessions are always very well received, and you will walk away with a great deal of useful information if you join us.
There is no charge to attend these sessions, but we do ask that you register in advance so we can reserve your spot. You can obtain more information if you head over to our estate planning webinar schedule page.
Schedule a Consultation!
Our doors are open if you are ready to work with a Hilton Head, SC estate planning attorney to develop a custom-crafted plan that ideally suits your needs. You can send us a message to request a consultation appointment, and we can be reached by phone at 843-815-8580.
Hunter is a member of the South Carolina Bar Association, the Beaufort County Bar Association, and has served on charitable and advisory boards in the Bluffton/Hilton Head area.
Hunter graduated from Hilton Head High School. He then earned his Bachelor of Science Degree in Economics from Clemson University, in Clemson, South Carolina.
Hunter graduated Cum Laude from Regent University School of Law in Virginia Beach, Virginia, having earned a Juris Doctor Degree. He also wrote his doctorial thesis on Estate Planning Dynasty Trusts.
Hunter has called Beaufort County home for since 1984, where he lives with his wife and two children.In his spare time he dabbles in automobiles, reading history, hunting and fishing.
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