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Leaving an heir $1: Why do people do it?

| Mar 30, 2021 | Estate Planning

Have you ever heard of someone leaving a single dollar to an heir in their estate plan? It sounds a bit confusing, as if they’re just wasting their time. They clearly didn’t want to leave the person anything, so why take the time to plan out how to leave one dollar?

Disinheriting the heir

The real reason that people do this is, as you already suspected, because they don’t want to leave them anything. They plan to disinherit that heir. However, the heir is directly related to them and has the grounds to challenge a will if there is reason to do so.

What people worry about is that, if they leave someone out of the will, the heir will claim that they must have been forgotten or accidentally omitted, and they’ll challenge to try to get some of the estate. To show that they haven’t forgotten and that they really wanted to omit that heir, they’ll leave them one dollar. They believe this will make such a challenge impossible.

You don’t have to do this, and it’s a misconception that it blocks a challenge. That challenge can still happen for many other reasons. Additionally, if you want to make it clear that you’re disinheriting someone, you can just state that in the will. Leaving them even the smallest possible asset is not required.

The one thing that this misconception does get right, however, is that it is wise to make it clear in your estate plan that you are disinheriting someone who would otherwise expect to be included. There is no need to do this for friends, distant relatives or others who never thought they’d get anything, but someone who is closer — such as a child — does have that expectation. It can make the entire process go far more smoothly if you eliminate confusion by directly telling everyone involved that you are intentionally leaving them out.

Setting up your plan

The goal of an estate plan is to make things clear to your heirs and to give them guidance when you’re gone. You need to understand all of the proper legal steps to take as you set this up.

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