Anthony S. Park

This is “Sam’s” cautionary tale of trying to DIY his dad’s estate over four years, with zero progress. I like to call this a Sisyphus story. Sisyphus was a figure from Greek mythology whose punishment for eternity was to push a heavy stone up a hill, but right when he would get to the top, the stone would come sliding back down to the bottom for him to start over again for all eternity. That is what Sam has felt like for the past four years.

Sam’s story

Sam’s dad died years ago in Europe, and Sam had court hearings in European probate courts where they were declared Sam and his siblings the heirs. But in Europe the probate process is much different than New York and the U.S., as there are no actual executors; the court just declares who are the heirs.

A couple of years later, the heirs discovered a U.S. bank account that they wanted to collect. Sam spent the next four years following bank instructions into a black hole. The bank would tell him to do one thing which led to months of playing liaison with the European courts and the U.S., only to be told that it was the wrong information. Each time this happened, Sam had to start all over again.

Finally, Sam called us, and we realized that we needed to start from scratch. Even after hiring us, Sam kept talking to the bank, which created more problems, mixed signals, and cross information.

Common Probate Mistakes

The first common probate mistake is to rely on the bank's “advice.” The bank is not an advisor. If anything, their incentives are to keep the money in the accounts.

The second common probate mistake is to underestimate the complexity of the situation. Many clients believe that they have a “simple” probate matter when they call our office for help. However, often after we ask them some preliminary questions, we find that it is actually a complex estate matter. Any time the estate deals with overseas factors, the situation is certainly more complex. This should have been a red flag for Sam.

Lastly, once an attorney is hired to handle the estate, it does not help for clients to continue to work on the estate. Clients may think that they can help reduce the amount of work or hourly cost if they do some of the probate work themselves. That is not how it works, and it could end up costing the client more to have the attorney fix the DIY mistakes.

Avoid Problems in Probate

The bankers are bureaucrats, not your advisors. If you are not getting headway immediately with a bank, get a professional to help you. An experienced probate attorney can navigate the bureaucratic banking problems.

Everyone thinks their case is “simple.” What someone thinks is simple is probably just the tip of the iceberg of complex problems or twists. How do you figure out if you truly have a simple case or a more complicated situation? Many excellent probate lawyers offer free consults, so use that consultation to find out. Lawyers offer free consultations for a reason! It helps the attorney and the client to see if they are a good fit for each other.

Lastly, when you hire someone, let them do their job!

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Many of our Solo Ager clients want to make sure they don’t leave anything to a relative who is distant, estranged, or they just dislike. Here are a couple of common misconceptions - and the best solution.

Can’t I just omit them from the Will?

The assumption is, “If I omit them from my Will, they have zero involvement, right?”

Unfortunately, that is not how the process works. They will still receive notice from the court regarding the Will. When you probate a will in court, you’re required to notify all the family members who would have inherited under the default inheritance law (what the inheritance plan would have been if there was no Will).

For example, you are unmarried with no children, and you have several nieces and nephews who are not involved in your life. Those nieces and nephews are the ones who would inherit if you didn’t have a Will, and they will receive a court notice even if you omit them from your Will.

That court notice is basically an invitation to come to court and contest the Will. Those nieces and nephews may not have legitimate grounds to contest, but may drain the estate’s funds fighting the legal battle, stress out your intended heirs, etc.

Can’t I specifically disinherit them in my Will?

Yes, this is called an “In terrorem” clause, but there are two problems with this approach:

1. You’re still notifying them and inviting them to contest your Will; and
2. In terrorem works best with an “incentive,” which you probably don’t want to give.

For example, an In terrorem clause could state that if a nephew contests the Will, then he might not receive anything. The problem here is that you didn’t want him to receive anything anyway. Now, he has no disincentive to contest the Will.

The In terrorem clause works best by giving the nephew something as a disincentive for him to challenge the Will: “I leave $10,000 to my nephew, but if he contests the Will, he will not be entitled to receive the $10,000.” In this example, you have given your nephew a disincentive to challenge, but you’ve also given him money as advanced blackmail that you would not have given to him in the first place.

Solution: A Trust

In the situation where you want to make sure a specific person does not get anything and cannot challenge your wishes - a Trust works best.

A Trust is a mechanism used to deliver assets to your heirs without the probate court process. If you don’t have the probate court process, then no notice is sent to heirs who are not named in the Trust. Even if an unnamed relative finds out about the Trust, there is no easy mechanism to contest your wishes. Unlike the In terrorem clause in the Will, there is no need to give an “incentive” in the Trust.

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Linda spent six months working with a general lawyer (meaning someone who practiced personal injury, litigation, and a dash of probate on the side). There was not much progress in those six months, so Linda became frustrated and transferred the case to us. Sadly, we had to basically start from scratch, because the general lawyer did essentially nothing.

What causes probate delays? Bad lawyers

In Linda’s situation, six months went by and it was as if nothing happened in her case. One of the reasons for the delayed probate was because the general lawyer did not know what preliminary Letters Testamentary were. An experienced probate lawyer would have noticed right away that Linda had a complicated probate and would have immediately filed for preliminary Letters Testamentary. If this had been filed immediately, Linda could’ve started “executor-ing” months ago.

Another reason probate can be delayed is drafting the Petition wrong. In Linda’s case, the general lawyer didn’t understand which family members must be notified, and therefore hadn’t even begun collecting their contact information.

Lastly, probate can be delayed because a general lawyer might not realize that the Will isn’t properly witnessed. (As a side note, this is a good reason to find an experienced attorney to draft your Will). Getting the correct witnessing on a decedent’s Will takes a lot of time, including tracking down the witnesses and having them sign affidavits. An experienced probate lawyer would notice the incorrect witnessing and get started on the correction process immediately.

As with any practice, if a lawyer does not have much experience in a certain area of law, he or she will probably miss important details and cause delays.

When a lawyer gives bad advice

In Linda’s situation, her deceased relative owned an income-producing property, and the general lawyer told Linda not to collect rent anymore from the tenants! This led to non-payment and problems with the tenants, which will cost the estate more money to work out. Instead of listing the house on the market during the summer, this lawyer’s bad advice means that Linda now must winterize the house. With proper legal advice, the house could have been sold and done with before the cold. In summary, bad legal advice causes more stress and aggravation for the client.

How can you avoid all this? Shop around: Compare lawyers, call their office, and visit their websites. Make sure you’re working with an experienced probate lawyer from the beginning.

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Bitcoin is currently a popular topic. Here, we are discussing the risk of theft verses risk of loss with these types of funds, specifically why that matters in the context of estate planning. We are by no means experts in this subject, but we’ve done our homework.

Estate planning for Bitcoin can feel like you are in a Divinci Code movie, with secret codes and memorized phrases. It can feel like a treasure map, compared to your traditional banking.

There is so much advice out there online telling you to take some extreme measures to prevent hackers and thieves from plundering your stash. However, you have to make sure you don’t overboard, at the expense of increasing your risk to another type of catastrophic loss, simply losing your Bitcoin!

Estate Planning for Bitcoin

One of the most common ways of holding your bitcoin is on “hardware wallets.” That means that you have a device, not connected to the internet, that has access to your key (the fancy word for your secret password). One way to look at it is that it’s like your ATM pin. The only difference is that you can visit a bank to reset your pin, but when it comes to bitcoin, no one can help you recover it. We’re not talking about a simple passcode with 7 to 8 letters; we’re talking a combination of 24 words that will allow you access to your bitcoin (also called a seed phrase).

In terms of security, you don’t want to leave this phrase accessible to anyone. The internet goes to great lengths to tell you how to keep this secure. They suggest never taking a photo, which is typically stored on your computer, phone, or cloud. This also goes for storing it on your computer. Again – hackable.

They suggest a handwritten note. Which in itself can be problematic. Paper is fragile. Not to mention, have you ever put a note in a “safe” place? A place that’s so safe even you can’t find it? There in lies the predicament. That’s quite a conundrum. One copy can get lost, while a few copies can be misused. Why we don’t have all the answers for storing not losing your phrase, we are here to compare the bigger risk – someone hacking your bitcoin and stealing it or you simply misplacing your phrase and losing it. Based on which is the bigger risk is how you should plan accordingly.

How Much Bitcoin Is Stolen?

According to Casa, one of the bitcoin custody firms out there, 1.6 million Bitcoin has been stolen of all time, out of 18 million total. The vast majority of these thefts have occurred by hacking big companies, as hackers are going for the big score. This also includes Ponzi schemes and fraud. For example, someone says they will buy Bitcoin for you with $100,000, but instead buys a Lamborghini.

We believe that this number is underreported. Not everyone reports it when their bitcoin is stolen, as they may believe that there is nothing that can be done to recover it.

How Much Bitcoin Is Lost Forever?

Let’s take a look at the statistics and compare lost vs stolen. By “lost” we mean that you’ve done such a good job of hiding your passcodes, that you cannot access the bitcoin. According to Chainalisys about 20% (or 3.7 million of 18 million) has simply been lost. That is more than twice the amount that has been stolen.

This number may be a little high, because Chainalisys may include super inactive accounts. However, even if you remove those accounts, the stats are still much higher than the amount of Bitcoin that is stolen.

As you decide to hold and you are learning how to use secure codes, keep these stats in mind. It is twice as likely that you will just lose your Bitcoin by your own doing compared to it being stolen. If you are that worried about having your second piece of paper hidden somewhere, it may be worth the risk of someone finding the second paper compared to you losing the only piece of paper.

When planning for your estate, you have to decide how you will leave these passcodes to your beneficiaries. There are a lot of ways, and they all come with their own risks. A family member may not be able to retrieve your access codes if given a treasure map to “find” the password. You have to balance the risk of simply not being able to access your bitcoin with the risk of having it stolen.

If you want to learn more about probate in general, please check out my book, “How Probate Works.” I don’t have a Bitcoin chapter yet, but you will get a sense of how the probate process applies to your Bitcoin situation.

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Another question that we receive often is “should I name a trust as beneficiary of my estate?” In a recent case, Rhonda reached out to us, because she wanted the benefits of a trust (avoid probate, reduce chance of a “will contest,” etc.), but she was not quite ready for the headache of a full-blown trust setup. In her particular situation, naming her trust as beneficiary makes sense. If you are considering this doing this, here are a few things you should consider.

How to Name Trust as Beneficiary

A full-blown trust has to be set up and funded. It can be a nominal amount, even as little as $10. It has to own things and you will need to convert your banking accounts, houses, and related items from your individual name to the trust name. It may be quite a bit of work in some situations. For example. if you live in a co-op, this can be a lot of work to change your deed. You will likely need board approval, and this will take time and work. If changing your banking, you will need to go to the bank and open new accounts in the trust name. You’ll then need to change any direct deposits and withdraws once the new account is open.

In Rhonda’s case, instead of changing all of her accounts now, she is leaving them in her name and changing the beneficiary of the accounts to a trust. For example, when you have life insurance, you can name a person or multiple people as beneficiaries. However, instead of naming a person, you can name your trust to be the recipient.

In her situation, her trust will be unfunded until she passes. Upon her passing, the trust will be funded using the beneficiary designations.

To name a trust as a beneficiary, there are three basic steps. You must create the trust document, you then fund the trust (even a nominal $10), and finally, you name a beneficiary. Usually, you can obtain change of beneficiary forms for your accounts to change the names. The result: you have a hollow, but ready, trust on standby, which is ready to accept funds as beneficiary upon your passing.

Pros of Your Trust as Beneficiary

One of the pros for taking this route is that, in theory, you get to avoid the costs and headache of probate. Probate is generally not easy and takes a long time. If there is a beneficiary on an account, then the account does not need to go through probate to be liquidated. You simply need a death certificate and a copy of the trust to withdraw the funds. Having a trust also reduces the chance of a will contest. If there is a wayward heir, they can contest the will if it is probated. If you do not probate, it’s much harder. You essentially create a challenge barrier with a trust.

There is also a phycological connection. Changing all of your accounts out of your name and into a trust name may feel as if it’s not yours. If that is an issue for you, then this option may be a good way around that feeling.

Cons of Your Trust as Beneficiary

This way of doing a trust does not protect you from court-appointed strangers (known as guardians) controlling your funds during your life. If everything is still in your name and you become incapacitated or someone can assert that you are in cognitive decline, then a guardian can be appointed to control your funds. However, if everything is owned by the trust, then a court-appointed guardian can not access those items. Only the trustee of the trust, as chosen by you, can control what happens. Not only does a full trust prevent a court-appointed stranger from controlling your assets, but they most likely won’t bother with you, because there are no funds for them to control.

In general, Anthony is not really a fan of naming a trust as a beneficiary, because in his experience, people generally do not do a good job tracking their beneficiary designations. We see very often where people forget to change their beneficiaries after relationship ends and people die. It is very easy to forget, even if you are really well organized. The designations are not conspicuous and are not usually listed on the statements, so people do forget. Bottom line – people do not remember.

Another reason that Anthony doesn’t suggest this route is that honestly, doing it this way does not really save as much time as you would think. It is actually very similar to what you will need to do with your assets when you create a full-blown trust. In either scenario, you will have to submit forms and provide documentation, which is almost the same process in both situations.

Naming a trust as your beneficiary is a good steppingstone as first step to a fully funded trust. We suggest you talk out your wishes and situation with an experienced estate planner to determine the best route for you.

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Instead of appointing a family member to administer an estate, you can hire a professional executor. We often get asked if this is a safe and better route. In a recent case, Sean contacted us to discuss this option. In his particular situation, he is from a blended family. His mother died and she is survived by three adult kids and a stepfather who was separated from his mother for a long time before her death. In his case, he is facing some possible trust issues. For example, the family could tentatively agree to equal shares, but the stepfather could claim full spousal status and kids could try to disqualify the stepdad (there is certainly an argument that he is not a spouse).

If the stepfather acts as the executor, the children may not be completely trusting. Similarly, if the children are the executors, the stepfather may have trust issues. With this complex family dynamic, an independent professional executor makes tons of sense. However, some of the heirs in Sean’s case were a bit concerned about handing over the reins and control of the entire estate to a stranger. Being apprehensive is completely understandable, but here’s why it still makes the most sense.

What is an Estate Accounting?

A professional executor will file a full accounting to close the estate. An accounting is an official record of all books. Everyone gets to see line by line every single dollar and cent that came in and went out of the estate. We are talking full transparency and disclosure. Every heir will get to see everything that happened without any questions. It’s all there in black and white. Professional executors do this not only to put everyone’s mind at ease, but it is also for their protection. Professional executors can only be released from liability from what they disclosed, which is why we disclose everything.

To put it bluntly, no matter how hard they try and how meticulously organized they are, amateur executors such as family members, friends, and neighbors keep terrible estate records. For example, in order for the estate to draft and file an estate accounting, our office has to work with the executor to gather all documents and records. Most of the time, many things are missing and there is a bunch of back and forth to find the missing documents. It costs the estate money to gather these docs and find the items that were never obtained or missing.

Usually, non-professional executor accountings are mediocre at best. On the contrary, professional executors will provide the estate with a clean and solid accounting. It’s not that we are more organized, it’s that professional executors are keenly aware of the risks of liability. We know that if we mess up, the courts will come down on us. We also know the end game, so we know how to start gathering and keep track of finances immediately upon starting the case. We are working the whole time towards producing a line-by-line accounting of all of the funds.

What Does an Executor Bond Do?

An executor bond is an insurance against the executor for the benefit of the heirs. So, if the executor makes a mistake, loses something, or is an outright thief resulting in the heirs not receiving what they should have, then the bonding company will pay the claim. With a bond in place, the worse that will happen is that you, as an heir, get to file a claim against the bonding insurance company to get the money. It will then be the job of the insurance company to recover the funds from the executor, and not the heirs.

To get a bond you need exceptional credit, especially with large estates. Generally, they want 750+ credit scores. It is tough for some amateur executors to get a bond for this reason. As a professional executor, we have never had a problem getting a bond and have never had a claim against a bond. If not required, very often, we will get a bond anyway to put the heirs at ease. In some cases, the courts simply require them of the executor, regardless of experience.

When you work with a professional executor and request for them to be bonded, make sure you are ok with the payment of the premium. This is the amount that will be paid annually to the bonding company by the estate. The premium fluctuates depending on the size of the estate and the bond amount. We can certainly get a quote beforehand and you can decide if it’s worth the annual payment.

Are Co-Executors a Good Idea?

In Sean’s case, one of the questions the family asked was if we can have one family member and one professional working as co-executors. They wanted to know if co-executors are a good idea. The short answer is no. It boils down to too many “cooks in the kitchen.” When you have too many people involved with what is really a one-person job, then it becomes more complicated.

You will need each executors’ original signatures on all documents and authorization for all decisions. So, all the benefits of hiring a pro as a centralized decision-maker with experience to move the estate along properly and quickly is being thrown out the window. There are situations where executors are required to do things in person, such as opening the estate bank account. Both executors would need to go the bank together, and this may be challenging to coordinate, especially if one executor lives out of town or out of the country.

It also complicates the financials. You will have two people keeping financial records differently, that you have to merge together at the end. Collecting and combining two executor’s documents will take substantially more time and the estate will bear the cost.

While we do not advocate this route, if it’s the only way the family will be on board with a professional, then we can explore it. For the right family, we are willing to do it. We recommend that you speak with the professional and research what goes into administrating an estate before deciding on the co-executorship route.

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Happy New Year! Solo Ager experts Joy Loverde, Sara Geber, and Carol Marak were kind enough to share their thoughts with us on what Solo Agers should map out in the new year. Here are your seven new year resolutions from your favorite Solo Ager experts:

Joy Loverde, is the author of two books, The Complete Eldercare Planner and Who Will Take Care of Me When I’m Old. She is an expert in this area of solo agers and we are grateful that she shared her insight with our followers on our podcast Episode 192: How to Plan for Old Age and Being Childless with Joy Loverde podcast. She offers the following New Year’s Resolutions:

1. Learn More About Shared Housing

Shared housing can be summarized in two words: “Golden Girls.” Instead of going into a facility, this is a situation where people share housing. This can be a more intimate, cozy environment, compared to a institution setting. Last year reminded us how important social interaction is, and a lot of people have learned that they want to be in the company of others. She believes that shared housing will increase in popularity and will take off this year, as a result of 2020. This may or may not work for everyone, but it is certainly something for a Solo Ager look into. Joy recommends researching and exploring this option to see if it is something to consider.

2. Be More Aware of the Full Responsibility of Pet Ownership

Another result of 2020 is increased pet ownership. Many people sought companionship from pets when isolated from the real world. Solo Agers need to know the extent of what it takes to care for a furry family member. If they haven’t done so already, now is a good time to research the financial and physical aspects of pet ownership. In particular, what will happen to your pet if you are unable to care for them? Joy recommends exploring a pet trust. While Anthony isn’t a fan of pet trusts, he explains that they are a vehicle to care for the pet financially. Instead of giving funds outright to a person to care for a pet, it’s put into a trust. Anthony suggests that instead of a pet trust, you find someone that will care for your pet properly if given an outright lump sum.

Sara Geber, PhD. is the author of Essential Retirement Planning for Solo Agers. She is also a retirement transition coach and a professional speaker on retirement and aging. Sara shared essential retirement planning tips with Anthony recently on his podcast. You can listen to them here (part 1) and here (part 2). Sara She suggests these New Year’s Resolutions for Solo Agers:

3. Review and update your planning documents

Sara suggests that Solo Agers take the time to review their estate planning documents. In particular, she suggests reviewing your Power of Attorney and Advance Directive, especially if you have not done so in five or more years. While this isn’t the easiest and most uplifting resolution, it is very important. Anthony suggests that you review these documents every 4 years, which coordinates with the Olympics. To him, it is an easier way to remember. This is like going to the dentist – you may not love it, but you have to do it.

4. Have “the conversation” with your family and/or other loved ones

 

Again, while not a fun topic of conversation, it’s important. You don’t have to make a whole to-do about telling them, but it’s a good time to start talking, even if it’s informally. If you don’t share your end of life wishes and emergency contacts, then no one might know. It doesn’t necessarily have to be family. It may be your Super or Doorman that may learn of your passing before others. They see you daily and may know if something is wrong. You will want them to know who to call.

While not easy to talk about, if you share your burial and inheritance wishes beforehand, it may make it easier on those who will help with your funeral planning and finances.

Carol Marak is a solo aging advisor and advocate. She is the founder of the Elder Orphan Facebook Group, which launched in 2016 has almost 10,000 members. She also has a very successful YouTube channel called Solo and Smart and her book Solo and Smart, is slated for publication in 2021. We were thrilled to have spoken with her in podcast Episode 194: Tips from Founder of The Elder Orphans Support Group.

5. Shift uncertainty to predictable outcomes

Carol says that you should work to shift uncertainty into predictable outcomes. Generally, uncertainty can be stressful, so she suggests you fix it. If you’re feeling stressed about your health – fix it. Talk to your primary care physician about things you can do to change your daily habits and feel better.

She suggests that you build a team of support. Not knowing who will help you when you need it can be stressful. A family can be built with friends and Carol calls these your “family of choice.” It does not necessarily need to be relatives. Find your team – your friends, your doorman, etc.

6. Never buy into the idea that you are powerless

Carol suggests that you list two goals you want to accomplish. They do not have to be big goals. Simply pick two things that you have thought about doing and do them. She suggests that to do this, you should find the people who can help you learn the skills or strategies to achieve them.

Anthony, a Solo Ager expert as well shares his resolutions for Solo Agers:

7. Read more books, less “news”

Anthony recommends that you read more books and watch less news. Books help to educate and sharpen your mind. Authors of books typically spend substantially more time researching and writing the book then say a blog post or news article that was written on the whim. He feels that books immerse you, contrary to news articles which tend to enflame you.

Reading keeps you sharp and talking about books makes you a better conversationalist than talking about news. Set a goal to read one or two books a year. Anthony suggests that you never put pressure on yourself to finish a book. If you start it and don’t like it, put it down. You can go back to it or you can simply never pick it up again. If you go into a book with that pressure, it’s much harder to get started reading. Knowing you can stop when you want gives you some mental freedom to try more and more books.

Let’s face it - book clubs sound more fun and social than news clubs! Another bonus – you don’t have to purchase books. You can borrow them from a library or even your friends.

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You may be surprised to learn that we receive requests quite often from people who wish to change their probate lawyer. This was the exact situation one of our clients was facing recently. “Linda” started her probate case with another lawyer but realized along the way that he was not doing a good job. So, she reached out to us to take over the case. Here’s a look at how that works.

First, from our perspective, changing firms is a double-edge sword for a lawyer. As a rule of thumb, attorneys do not particularly like to take clients who have fired their previous attorney, as it could potentially be a red flag. On the other hand, if a client has been legitimately been deprived by a past attorney, they are grateful to have help and are a pleasure to work with, as is the case with Linda.

“Linda’s” story

Linda hired a “flat-fee” probate lawyer, which she thought was a great deal. However, after 9 months, Linda realized the lawyer had not done much. She also learned he didn’t really know what he was doing. For example, he hadn’t notified any heirs, collected any of the preliminary financial documents, or even gathered the basic information, which is typically what seasoned probate attorneys do right away. That led Linda to seek out another lawyer. Not only did she want a new lawyer to help her, but she also wanted to recoup as much of her “flat-fee” as possible. After all, not much had been done in 9 months.

How To Change Lawyers In The Middle Of A Case

If the previous lawyer hasn’t done any work on the case yet, then it is pretty easy. You can request they stop working and hire someone new. However, it gets more complicated if the attorney has spent any time on the case, which can include opening the case and corresponding with the court. If that’s the case, you will want to decide wisely – even if you can’t stand working with a particular attorney, if you are close to the finish line, it may be in the best interest of the case to see it through to the end. You will have to weigh it out.

How To Transfer Case From One Lawyer To Another

If the case has progressed to the point of filing documents with the court, the attorney who filed the documents is called the “Attorney of Record.” This means they are your official lawyer in the eyes of the court. If this is the case, you simply can’t change who represents you without the approval of the court. The court requires documentation to change attorneys at this point, essentially granting permission to change attorneys. This document must be signed by all parties, including yourself, the previous attorney, and the new attorney.

This puts you in a position of needing something from the previous attorney. Therefore, it’s not advisable to air your grievances or place a nasty phone call to their office (which is actually never a good idea). Even though you may be upset with them, you need that document to be signed.

One thing to keep in mind is that an attorney may elect to not sign the document until all invoices have been settled. You may have to pay the balances in order to move on. Although you may disagree with the invoice, in reality, if they have done the work, they should be paid. You have to weigh out if paying the outstanding balances, even though they didn’t do much work in your opinion, is worth it to change attorneys.

Another reason to keep the peace is for the transition to be smooth. Your new attorney will need to get the files from the previous attorney. While some records can be obtained from the court, the previous attorney may have originals that is easier to get from them then to retrieve otherwise.

Are Lawyer Retainer Fees Refundable?

The short answer is technically yes, but in reality, they are usually not. In New York and in other states, attorneys are not allowed to charge non-refundable retainers. Although found in most attorney agreements, it is not usually permissible. Unless you change your mind the day after you send the check, most lawyers would have done enough work to have earned the retainer. For example, opening the file, reviewing the documents, gathering preliminary documents, calling the court, etc., adds up, which may use most if not all of the retainer. Lawyers are definitely entitled to fees for the work they do, even if you are not satisfied with their work.

If you are considering changing attorneys, you may find that the cost of keeping your current attorney outweighs starting over with a new attorney. Alternately, depending on the particular situation, it’s worth it to start over. As with any decision, weighing your options before making the switch is important.

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In this case, “Robin,” a solo ager, is looking to update her estate plan. She is divorced and has two biological daughters. One is living abroad and one not on good terms with her mother. One lives too far away to be a part of the estate plan and the other has been neglectful and the relationship is strained. For these reasons, she does not want to give her inheritance either daughter.

How to Disinherit Someone in a Will

In theory, you can simply just omit them. However, some people prefer to have a simple explanation as to why a particular person will not inherit, such as “I have already given generously over their lifetime” or “my daughter has not treated me well so I am choosing to leave her out.” You don’t need to over justify, but you are simply explaining to those reading your will after you passed why you left someone out.

What is an In Terrorem Clause?

During probate, anyone who would have received an inheritance in the absence of a will has a right to object by default. In Robin’s case, in the absence of a will, her estate would be divided equally between her two biological daughters, leaving them both with the right to object. This could lead to litigation and lots of problems.

An In Terrorem clause is designed so that if a rightful heir objects to the will, then they receive nothing. However, in this particular case, the daughters already get nothing. So, is there really anything to lose by objecting? Honestly, not really.

This clause is typically stronger if, instead of omitting a person, the person you would like to leave out instead receives less of a percentage of the estate. In Robin’s case, let’s say that she decides to leave 75% of her estate to her overseas daughter and 25% to her estranged daughter. This way, if the estranged daughter objects, she gets nothing. The risk of loss is greater than if she was simply omitted in the first place.

If you plan to go this route, there is an argument that you need to leave them an amount large enough to dissuade from objecting. It can be small, but not too small ($10 for example, isn’t enough to dissuade them). Depending on the size of the estate, this amount could be $1,000, $10,000, or even $100,000.

However, in Robin’s situation, she doesn’t want to leave anything to the estranged daughter and leaving her $10,000 is contrary to what she wants. It’s not going to feel great to leave her money as a type of advanced extortion.

Setting up a Trust for Grandchildren

In Robin’s case, we came up with an elegant solution to disinheriting a child, which is to set up a trust for her grandchildren. Robin’s goal isn’t to disinherit the family, she just isn’t happy with the daughter. Therefore, she is going to skip her daughters and give to her grandchildren. Not only does it keep her estate in the family, but it will also create less conflict within the family.

Additionally, the daughters are less likely to object, since the estate will go to their kids. Robin is happy with this solution, as it will keep the peace and keep the money in the family.

Another bonus is that trusts come with huge benefits: trusts protect the assets. For example, if the grandchildren get married and divorced, the trust is protected. A trust is essentially a gift in addition to the monetary gift.

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Believe it or not, we have clients to do not wish to accept their inheritance. Although extremely rare, there is actually no legal obligation to accept, and it’s completely okay to decline. There are often situations where it is best.

In a recent case, our client “Evette” lost her long-time boyfriend. They were never legally married but were practically husband and wife. Everyone knew them as a couple, including their family and friends. In this case, Ed did not have a Will. As we have discussed previously, non-married spouses do not legally inherit from the deceased partner. Under the laws of New York, Ed’s biological adult daughter would receive 100% of his estate. The daughter, acknowledging that Evette was for all intents and purposes the spouse, has opted to include Evette in the estate distribution.

Disclaimer of Inheritance Rights

Disclaimer is a fancy word for not accepting and forfeiting your share of the inheritance. In Evette’s example, the daughter could simply say “I don’t want anything to do with it. I do not accept.”

The pro is that the daughter signs one form and she is done with the estate. No one will bother her again. If you are estranged, which isn’t the case here, that may be the best route. This option is the least hassle, but it removes all control.

The con is that if you forfeit, you no longer have a say in anything. The default inheritance laws would kick in and the share would go to the next in line. In this case, Ed still has brothers, and by law it would go to them, which is not what he wanted.

Can I Give My Inheritance to Someone Else?

Sure, you can give your inheritance to someone else, but only once you receive it, which could be months or years after probate starts. The drawback is that there is much uncertainly. In this case, the daughter will be waiting for quite a while to receive the funds. In that time, she can simply change her mind about giving a share to Evette. Additionally, the daughter will need to stay involved in the probate process, whether she wants to or not.

Transferring an Inheritance by Executing an Assignment

In this case, an Assignment of Interest is the best option. Here, the daughter will sign a document agreeing to assign a percentage of her share to Evette.

Instead of waiting to see if the daughter will actually share the inheritance with the girlfriend, this this formality creates certainty and can help eliminate any issues that could arise between a family.

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