by Adam Bartsch

It's always an uncomfortable question, but one that has been weighing on the parent: what do we do about the child that has stumbled from one problem to the next, and probably will never get on their feet? Or, is it OK to disinherit the ungrateful son or daughter who turned their back on the family?

Having spoken to many parents about their families, the presence of some degree of dysfunction in the family is the rule rather than the exception. Discussions about a family almost always include one or more large challenges caused by a child.

While most parents are hesitant to discuss sensitive family issues, in the context of estate planning it is important to confront the issues and move forward rather than procrastinating and avoiding the issues altogether.

When parents have a child requiring extra attention, there are many questions to address, but two set the framework for moving forward: Does the child merit treatment different from his or her sibling? If so, what options exist and what approach makes sense?

The first question is usually the more difficult of the two because the answers are rarely black and white. If a child has repeatedly demonstrated financial immaturity or has a drug or alcohol problem, do you withhold an inheritance or ensure that someone else is co-managing the funds for the child? If a child has broken from the family, do you cut them out entirely from an inheritance? By treating one child differently, what does that portend for relationships among the children after the parents have passed on?

Answering these questions is rarely easy. But knowing what some of the options are, and what others have done in similar situations, may make the questions easier to work through.

One option is to provide your children what might be considered soft incentives. Soft incentives build flexibility into the estate plan to allow the parent to make adjustments at a later date. Equally important, because the children know the plan can be changed, they adjust their behavior accordingly. For instance, you can set up a trust so that even after the first spouse has died, the survivor can change who inherits, and how much. This approach is commonly referred to as the "be nice to Mom" provision. If the kids are smart, they won't do anything that would aggravate mom enough to write them out of an inheritance.

A more targeted approach applies hard incentives. Hard incentives may require certain goals be met before an inheritance is distributed. For instance, a child with substance abuse problems must demonstrate that they have been free of drugs or alcohol for a certain period of time before they can receive a portion of their inheritance. Or, parents might write into their documents that a child must graduate from an accredited college before funds may be distributed from a trust. The hard incentives are more appropriate where a young adult has shown a tendency to get off track, or where a child is too young for the parents to know if he or she would set goals and work hard to accomplish them despite inheriting a large sum at a young age.

If, however, relations are frayed to the point that disinheritance is the only answer, it's important to accomplish this with as little trouble as possible. The conventional wisdom is that you leave the child $1, so that you acknowledge they exist, but effectively write them out of your will. The danger with this approach is that a child who has nothing to lose is more likely to challenge the will or trust in court. An alternative favored by many estate planning attorneys is to incorporate language in the estate plan documents stating that you are leaving nothing to your son or daughter, then buttress this approach by writing a handwritten letter to your child explaining your actions and leave it in a sealed envelope with your estate plan documents. By doing so, you are showing that you have given the issue serious thought and demonstrating that your thinking is clear and independent of outside influence, two factors that could convince the child a court challenge is unlikely to succeed.

Addressing complex family dynamics in your estate planning may appear overwhelming, but your situation is unlikely to be unique. By learning what your options are, and what others have done in similar circumstances, you can establish a plan that allows you to rest easier at night.

As We Age is published on the first Thursday of every month. Author Adam Bartsch is the founder of Shelburne-based NorthEast Estates and Trusts, PLLC (NEET), a law firm focusing solely on estate planning for residents of Vermont, New York and Massachusetts since 2004. NEET is located in the Shelburne Creamery Building, and Adam can be reached at 985-8811. More than 50 previous columns are available online at www.NEET.info, on the Articles page.