We often hear from people who would like to disinherit a family member from their estate plan, for one reason or another. While the motivation behind the disinheritance may vary, the ultimate goal is typically the same: to ensure that a specific family member does not receive any substantial distribution of wealth from the estate. Accomplishing this goal has always involved consideration of the economic circumstances of the affected individual, as well as up to date knowledge of the applicable body of laws that address and limit disinheritance of family members, some of whom enjoy a natural presumption of inheritance. Recent changes to California law, however, have added a new layer of requirements that heighten the need for careful analysis of your estate plan to ensure your wishes are ultimately realized.
California law presumes that any direct heirs-a person's children and spouse-will be considered within the scope of a person's estate planning documents. This means that it will not suffice to simply omit a direct heir from your Will or Trust. Doing so may result in a determination that the omitted person was simply forgotten by the person signing the document. Consequently, the omitted person would be entitled to automatically receive a share of the estate, according to the natural presumption of inheritance for direct heirs. To avoid this outcome, specific steps must be taken, including the addition of an explicit acknowledgment within the Will or Trust to indicate that the estate plan contemplates the person being disinherited and purposely chooses to treat that person as disinherited.
Other supplemental devices can also be used to help fortify your estate plan against attacks from discontented heirs. In addition to clauses specifying disinheritance, No Contest Clauses serve to automatically disinherit anyone who contests a Trust or Will or any of its provisions, restrictions, or conditions. Such clauses are frequently included in a Will or Trust to protect the estate plan and can be very useful and effective tools to protect your interests. Even when such clauses have been carefully drafted, however, they should be periodically reviewed to ensure optimal concordance with the evolving legal environment.
One recent change to California law regarding the interpretation and enforcement of No Contest Clauses involves the standard of proof, which was increased from “reasonable cause” to “probable cause”. The effect of that seemingly minor change is that No Contest Clauses are now marginally harder to enforce, requiring more attention during the drafting of the estate plan in order to avoid estate or trust litigation.
Nevertheless, with careful planning and competent legal guidance, No Contest Clauses can still be a valuable part of your broader estate plan. The qualified attorneys at HMS Law Group are ready to help you navigate the process to ensure that you get the most out of your estate plan.