My father-in-law recently passed away and we just received a copy of his will. As it turns out, his final wishes were for his estate to be distributed to just a subset of his children (there’s no spouse in the picture).
In doing this, he didn’t specifically state that he was disinheriting anyone, but he did list the name of all of his children in one section and then went on to detail how his assets should be distributed in a subsequent section.
Knowing the backstory, I’m sure that this was intentional and I doubt that anyone will challenge it. Just to be on the safe side, however, he did go on to specify that anyone who contests the validity of his will is entitled to $1 — no more, no less.
But is this sort of an in terrorem (or “no-contest”) clause the best way to go about discouraging litigation? Not really.
Note: The term in terrorem is Latin for “in fright” or “in terror” — you’re essentially trying to scare people into respecting your final wishes.
In fact, Herbert Nass lists the use of a $1 in terrorem clause as Mistake #62 in his book “The 101 Biggest Estate Planning Mistakes,” listing it immediately after omitting a no-contest clause entirely.
The reason for this is that disinherited parties will have nothing to lose (other than legal expenses) by challenging the validity of your will if you don’t leave them anything. Instead, many estate planning experts suggest making a meaningful bequest to the party that is otherwise being disinherited.
Obviously, the term “meaningful” is open to interpretation but, in general terms, you should be thinking of an amount that is likely to dissuade someone from risking a challenge while still being small enough to have the effect of disinheriting them.
When coupled with an enforceable no-contest clause, this sort of minimal bequest can be a very effective means of avoiding disputes after you’re gone. Hopefully this is a non-issue for you, but if you’re planning on leaving unequal amounts (or even nothing) to your descendants, then it’s something to consider.
This is definitely food for thought, though you would be well-advised to seek the counsel of a qualified professional as you assemble your estate plan as opposed to relying on the writings of some random dude on the web…