Follow Andrew Linkedin Twitter Facebook
Email Andrew Email
Legal Issues
May 19, 2017

The Five Heirs Who Shouldn’t Inherit Assets Directly

Sponsored Content provided by Andrew Olsen - Elder Law Attorney, CSH Law

When people die without a will, the state’s intestacy laws dictate which heirs will inherit from the deceased person’s estate. Without a will, these heirs stand to inherit outright both personal belongings and money.  Even with a will, a testator can decide which heirs inherit from the estate, but if there is no contingent trust set up for certain heirs, a financial inheritance can adversely affect these heirs. 
 
The following five kinds of heirs are people who probably should not inherit large sums of money outright—either through a will or through the intestacy laws:
 

  • Disabled spouses and children with special needs. Spouses who are disabled will, at some point, qualify for public benefits, such as Medicaid or Social Security Disability, as a result of their condition. There is a realistic probability that if these disabled spouses inherit money, their eligibility for public benefits could be jeopardized. Potentially, even a small inheritance could result in the spouse losing the public benefits. Similarly, as with disabled spouses, minors with special needs may also be eligible for certain government benefits due to their condition. With these kinds of heirs, an inheritance may adversely affect their eligibility for certain financial assistance or else puts these heirs in a financially compromising position at an early ag4.
  • Minors. Minors cannot inherit from an estate until they are legal adults. And for good reason, because minors are not usually in a position to handle money responsibly.  Without prior provision for a trust for underage beneficiaries, any inheritance will have to be paid to the clerk of court with no guidelines for how to spend money to assist the minor.
  • Heirs with creditors. Certain kinds of people are known credit risks. These are people who have filed for bankruptcy before. These are people with poor credit ratings. These are people who may own financially adverse businesses like construction companies. Spendthrifts are heirs who have no business inheriting large sums of money outright due to the potential for the entire inheritance to be lost due to reckless spending.
  • Heirs with dependency problems. People who are addicts and dependent on drugs or alcohol are generally not ideal candidates to inherit money outright. Potentially, an inheritance could be spent in a matter of weeks or days by some addicts.
  • Children with rocky marriages. If a testator’s adult children are in troubled marriages, a new inheritance might be incentive for the child’s spouse to consult a divorce lawyer and lay claim to the inheritance. Here, there is potential for the inheritance to be split with a child-heir’s ex-spouse.
While these kinds of heirs may not be ideal candidates to inherit money outright, they should not be written out of an estate plan entirely. The best way to protect an inheritance for these heirs would be through a well-drafted trust based on the circumstances.
 
A trust permits the trustor to control the purse strings by setting forth certain criteria for the heirs—called trust beneficiaries—to inherit or receive money. Trusts can be included in a will as a contingency or can be executed while the trustor is alive.
 
Well-drafted estate planning documents and a consultation with an attorney who specializes in elder law or estate planning can address specific concerns with heirs.

Andrew Olsen is an attorney in the CSH Law Elder Law Practice Group in Wilmington, NC, where he practices in the areas of elder law, estate planning probate, guardianship, alternative dispute resolution, estate and trust litigation, special needs planning and veteran’s benefits. To contact Olsen, call (910) 777-5733 or email him at [email protected].
 

Ico insights

INSIGHTS

SPONSORS' CONTENT
Lgoriginalheadshot 311794626

Summer is the New Holidaze

Laura Bransfield - Summerfield Custom Wellness
Chadwoutersheadshot

Disaster Relief: Employers Helping Employees

Chad Wouters - Earney & Company, LLP
Billhunter300x300 b&w

Doodle for Your Noodle

Bill Hunter - Wilmington Design Company

Trending News

Benefits Spring Up In Florence’s Wake

Staff Reports - Oct 19, 2018

TRU Colors Included In South By Southwest's Next Lineup

Vicky Janowski - Oct 19, 2018

Wilmington Area Home Sales Fell 48 To 63 Percent During Storm Month, Report Shows

Cece Nunn - Oct 19, 2018

Insurance Industry Sees A Flood Of Claims

Cece Nunn and Christina Haley O'Neal - Oct 19, 2018

Building, Rebuilding Homes After Hurricane

Cece Nunn - Oct 19, 2018

In The Current Issue

Benefits Spring Up In Florence’s Wake

The aftermath of Hurricane Florence left the region with downed trees, flooded homes and displaced residents in need. This destruction, howe...


Insurance Industry Sees A Flood Of Claims

As Ian Archibald awaited the arrival of a State Farm Insurance adjuster at his Wilmington home on Oct. 9, his mind was also on a much more d...


Cardinal Foods’ Growth Mode

Cardinal Foods LLC has expanded a market and operations for local farmers under the leadership of Corey Barnhill, founder, president and CEO...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2018 Power Breakfast - Dishing on the Restaurant Biz
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties
2017 Health Care Heroes