Ken Moraif  

Ken, Hello everyone, and welcome to Money matters with Ken Moray. And this is the podcast where we try to have more fun than a human being should be allowed to have when talking about all of this boring financial stuff. And on the show today, we’re going to be talking about cutting kids out of your will. How to do it carefully, and it’s very important that you do that, because the last thing I think you want on your hands is a family war. So before we get going, let me introduce myself. As I said, I am Ken Moray. I am founder and CEO of retirement planners of America, and we work with people who are over 50, who are retired or retiring soon. So that’s you. This is the show is designed for you. So let’s get going. Let me bring Jeromy to the conversation. Gosh, I for a minute there, forgot your name. It’s good to see you, Jeromy. How are you doing?

Jeremy Thornton  

It’s wonderful to be here. I’m doing well. How are you doing?

Ken Moraif  

I’m doing great. So have you been taken out of your parents will lately.

Jeremy Thornton  

I Not that I’m aware of. Okay, that conversation hasn’t happened yet. Okay, so take it off the table. Are you pretty good?

Ken Moraif  

Are you deserving? Wow,

Jeremy Thornton  

that is a that’s a theological question that I don’t think I can answer.

Ken Moraif  

Because, you know, on this show, we call your heirs, you’re greedy, unwashed, undeserving heirs, and so for the most part, you just want to cut them all out, right? Yes, they’re greedy, unwashed and undeserving. Yeah, usually so, but you’re deserving, I can tell. So let’s, let’s dive in so somebody wants to cut their child out of the will.

Jeremy Thornton  

Yeah, that’s a can be a kind of dicey situation to navigate with emotions and legality and all these kinds of things. And I think it could probably create a conflict, which is something that is definitely to take into consideration. What are some reasons that someone would might consider cutting a child out of a will.

Ken Moraif  

Yeah, there’s, there’s several, as a matter of fact. One is, you don’t like that child anymore. Yeah, right. That’s, that’s kind of one of the more basic ones is that child has just gotten on your nerves, and at this point I’m taking you out. Another is that maybe they are vulnerable to, you know, outside influences. You know, they’re they’re financially, not very good with money, and you’re concerned about that the other children in your family may have told you that. You know, maybe they don’t want the child to be included, including, or you may want to give more money to a charity or another child’s spouse or something like that, versus this child, and also any gifts you’ve already made that already cover that child. So, for example, you may have bought them a house or something, and so you’ve already taken care of them, and now you want to take care of the rest, right? So there are lots of considerations that go into that, but regardless of how you do it, you know, what I found in my experience is that it’s rarely because you know, a parent or a grandparent for that matter, wants to punish the child. You know, it’s like I want to punish them, and sometimes they do want to, you know, they’re kind of mad, and I tell them, let’s calm down, you know, let’s let this simmer for a while, because you don’t want to make any decisions that you’ll regret later. So it’s always important to kind of temper your enthusiasm. When you get angry with a child because they hurt your feelings or something, right? Yeah, you

Jeremy Thornton  

have that emotional kind of reaction, and then you make a decision, and then you forget about that decision later on. And you never intended to leave them out permanently. It was kind of a key to the moment type thing. Okay, so let’s go with one of those. Or let’s say that emotions flared. Things were said, they weren’t meant to be said, and so I make a decision, I’m going to cut out my child from that will do I need to tell that child.

Ken Moraif  

I mean, legally, No, all right, there’s no legal there’s no law that says that if you’re going to write a child out of your will, that you have to tell them, however, it’s pretty wise to do so, you know, transparency. You don’t want that child to be surprised. Yes, you know, in the movies, it’s always like, you know, they have the unveiling of the will, and one of the child, one of the children, is like, what you mean? I’m not in there, and then they plot to kill all the other kids. Movie, yeah. Makes movie. It’s a great movie, but it’s a terrible family dynamic. Okay, so, so you know, you know what? You don’t want one child plotting to kill everybody else because they’re jealous or they want the money or whatever it may be. So it is a good idea to explain to that child and to the other children. For that matter, a. If you have more than one, why it is that you are going to make this move? Yeah.

Jeremy Thornton  

Okay, so we’re making the move. We’re going to explain it. How do we do that legally?

Ken Moraif  

Yeah, so the one thing that you have to be very careful of when you are writing a child out of the will is what is called contestation. Okay, okay? Because they’re gonna, they’re gonna say, No, mom and dad love me. You know, this was not the, you know, this is undue influence, or they were under duress, or, you know, they’re gonna come up with all kinds of things. Right to get back into the will, fight it in court. So you to do it legally. You want to make sure that there is no ambiguity. You want to very specifically state, I have chosen to leave this child out of the will. If you really want to make it personal, you could say, I leave you $1 which, that’s what happens in the movies too, right? I leave $1 billion dollars to this child, and to you $1 and then that child walks out of there is like, okay, but you want to make sure that they that if you’re doing it legally, it’s very clearly stated

Jeremy Thornton  

that this is what you’re doing. Okay, yeah, that makes So, if we’re just talking about a will here, what about other types of leaving things behind, such as a trust? Yes, or something like that, yeah.

Ken Moraif  

So there’s another way of doing it, and that is you can create a trust and name the beneficiaries of the trust, and don’t include this child, right? And so now, essentially, you’ve taken them out of your will, because now you’ve created a trust. And the thing about creating a trust is also a sign of intentionality, because if you took the time to talk to a lawyer designed the trust, go through all of that expense and time and everything else, and then the child says, no, no, no, they never meant to do that. Well, that’s a pretty hard argument, because it’s like, you know, they spent several meetings with his lawyer. They did all this stuff, and I’m sorry, but your case holds no water. Yeah, so setting up a trust is a very powerful way of I guess taking a child out of your

Jeremy Thornton  

out of your will absolutely so talking about the concentration and a child being left out after you pass them fighting it in court. Are there states or there? What other situations can basically children try to fight that out? How can they make that claim, yeah,

Ken Moraif  

there are some states. So that’s why you know everything we talk about when we talk about estate planning and all of that is important that you speak with an attorney, because there are states where they have what’s called forced heirship, right? And so where you are not allowed, basically by law, to disinherit a child or children, and so therefore you want to make sure that the laws in the state that you are doing it are amenable to that. However, what you can also do is you can create what’s called a living trust. And if you do that, that applies in all states. And so that’s a way, I guess, you might say, of getting around that. But again, talk to an attorney to make sure that the state you’re in allows for this if you want to do

Jeremy Thornton  

it absolutely okay. So we’re talking about legally what we’re allowed to do. What are some of the more, I guess, other risks, like emotional kind of that battle, things like that going into and then even after your passing,

Ken Moraif  

yeah, you know, it is an important consideration, because emotions are going to be high on this one. You know, there is no child that’s going to appreciate, you know, being written out of the will absolutely that I can think of anyway, and so and so you have to make sure, as we talked about earlier, that you’re explaining it. And if you made your decision, the conversation is, this is not a debate I’m having with you. I’m just telling you what I’m doing and why, but it’s not up for debate, so you don’t get into a big argument with them. The other thing also is, you know, there’s a weird dynamic that happens and that other children, your other children may feel guilty that they’re going to inherit and that child isn’t. So you got to, you got to, this is all about communication and making sure that everybody is on the same at least they understand why you’re doing it. They may not agree with it, right? But in the end, it is your money, right, you know? And in the end, it is how you want it to go and who you want it to go to, and in the manner you want it to go to, that’s it’s your money, and if that’s a decision you’ve made, then you know they have to abide by that so. But I think the important thing is communication, explanation, and that way, at least they know what’s going on, and they don’t find out when there’s the reading of the will and they get the shock moment that. Yes that we see in the movies, clarity,

Jeremy Thornton  

honesty and just kind of being up front can be some really good ways to kind of hit that before it happens. Okay, so you know, what are some what are the key takeaways for leaving a child out of a will or an inheritance.

Ken Moraif  

I guess the key takeaway is that it is before I answer that question, I want to give you an example of how not to do it. So a good friend of mine is a lawyer and is doing very, very well. And his sister is a teacher, and so she’s, she’s doing well, but she’s not doing as well as he is. And so his mom, who is a widow, asked him, you’re, since you’re a lawyer, can you write yourself out of the will and leave everything to your sister? Right? He was like, What?

Jeremy Thornton  

No, could you do that for free, by the way, pro bono?

Ken Moraif  

Yeah, I’m not going to do that. And he got really angry. They had a huge fight. And she was like, but you’re doing well, and she’s not doing as well as you, and you don’t need the money and all that. And he got very upset about this, but it was her desire, and it is her money. Okay, so back to your question, what’s the big takeaway? The first takeaway is that it is not illegal to, in almost every state, to disinherit a child. You can do that if you so desire. What is so you can but, but the important thing is communication. Yes, you know, explain to everybody why you’re doing it, and again, the way you couch it, in my opinion, the best way is, this is not up for debate. This is a decision I’ve made. The reason I’m telling you all of this is so that you are aware. I don’t want you to be surprised by this. I want us to, you know, basically, hash it out. Now, while I’m here to hash it out with you, but then after that, My decision is made. And by the way, if you move into my town and you let me spend more time with the grandchildren, maybe I’ll bring you back. That’s fair. The old thing is, you know, the higher the inheritance, the more likely there to spend more time with you anyway, so that’s it. So, yeah. So ladies and gentlemen, I hope you had as much fun watching and listening to this podcast as we did making it for you. Make sure you like and subscribe you go to our website. It’s rpoa.com where you can find all kinds of content and great stuff, and we’ll talk soon retirement planners of America, RPOA.