I’d like to think my wife and I are on pleasant enough terms where I am never going to ask myself this question: can I disinherit my spouse?
But the decision to disinherit somebody doesn’t always come about because you don’t like each other; there can be other reasons why it makes sense to leave your assets to someone other than your spouse.
REASONS TO DISINHERIT YOUR SPOUSE
One such reason might be that your spouse simply has enough assets in his or her own name and you have both agreed that your assets are best used somewhere else… perhaps in a trust for the education of your grand kids, or maybe for a charity that you support. Another reason could be estate taxes — by leaving assets to another person (or to a trust), you prevent your spouse’s estate from getting so large that estate taxes will be due on his or her passing. Yet another reason may be a concern that your spouse will be taken advantage of when you are gone, and you want assets to be held for him or her by a trustee. So…can I disinherit my spouse?
The most important part of this answer is this: in Minnesota, you cannot — ever — disinherit your spouse through your will or trust document (by itself). In Minnesota your spouse has a guaranteed right to his or her spousal share. This means that even if your will is drafted to give all of your money goes to charity, and you change all of the beneficiaries of you IRAs and life insurance (your “non-probate” assets) to the names of your children, your spouse still has certain rights including the right to live in the house for his or her life and for some monthly support from the estate.
According to Minnesota law, your spouse also has a right to a percentage of the augmented estate. The augmented state is (simplified) the value of your stuff plus the value of your spouse’s stuff. If you and your spouse have been married for only a year, your spouse has a guaranteed right to three percent of the augmented estate. This percentage increases every year of marriage until year fifteen, in which your spouse has a guaranteed right to fifty percent of the augmented estate — regardless of what you’ve written in your will or other planning documents, and regardless of how you’ve written your beneficiary designation for your non-probate accounts. It follows that if at the fifteen-year mark the surviving spouse has more than fifty percent of your combined assets in his or her name already, then those assets already exceed half of the augmented estate and there is no additional claim to a spousal share.
WAIVER OF RIGHTS
So, your spouse has a guaranteed, inalienable right to get a portion of your estate, right? Not so fast. There are three ways your spouse can forfeit his or her share.
Pre-nuptial agreement: Properly drafted, a pre-nuptial agreement can allow you and your spouse to disinherit each other.
Post-nuptial agreement: Your spouse can agree after you are married to forfeit certain property rights. This includes the right to his or her spousal share.
Consent to will: Your spouse can sign an acceptance of the terms of your will, including a will that completely disinherits him or her.
You’ll notice that all three of these options involve your spouse affirmatively giving permission to you to give his or her share to someone else. This makes sense, since the spousal share is at its core a property right, and we can give away our property as we choose. Your attorney should use extreme caution when drafting any of these three documents: your spouse should have his or her own attorney review the terms of the document to make sure he or she understands what is being given up and any consequences of doing so.
Disinheriting anyone is a big decision that can carry big legal consequences. Make sure you contact an attorney who is experienced in estate planning before making any major decision that affects your loved ones. Done properly, there are ways your assets may better serve your family than if they are all left to your husband or wife. Please contact me so I can help.
Philip J. Ruce creates wills and trusts for families who want to feel secure that their loved ones are cared-for. Philip is a trust and estate attorney based in Minneapolis, Minnesota. Philip is the author of Trustee University: The Guidebook to Best Practices for Family Trustees. available at Amazon.com in paperback or Kindle edition (free chapter available here!) He also works with trustees and beneficiaries who need help with their trusts. You can contact him here.