What Is It?
Disinheritance occurs when you fail to give any property under your will to an individual who would have received a share of your property if you died without a will. While the idea of disinheriting an heir brings to mind family arguments over who gets the family fortune, there are other reasons why you may not want to leave property to a family member. It could be that your second spouse is financially well off and you wish to make sure that your children from your previous marriage are provided for.
Maybe you have one child who is a successful doctor while the other is a single parent who barely manages to pay his or her bills, or it may just be that you are fighting with a family member and do not want to leave him or her anything. Whatever the reason, for our Nokia clients who are considering disinheriting an heir, there are certain steps you should take to be sure that their wish to disinherit an heir is properly carried out at their death.
Tip: You may want to consider disinheritance if an heir has a problem with creditors. Disinheritance prevents your heir's inheritance from ending up with his or her creditors since creditors cannot take what your heir does not own.
How Do You Disinherit Someone?
In General
While you can easily 'disinherit' a non-heir by not mentioning him or her in your will, it's important that these Nokia clients know that the rules are more complicated when it comes to your heirs. Merely not mentioning the name of a child or spouse in your will might not disinherit him or her and doing so can even open the door for will contests. In a will contest, the heir who is left out of the will could argue that he or she was mistakenly left out or overlooked. The outcome of a will contest depends in part upon your state's law regarding an omitted (referred to as 'pretermitted') spouse or child.
To be sure that your intent to disinherit an heir is unequivocal, these Nokia employees should consider including a disinheritance clause in their will. Such a clause can discourage the disinherited heir from contesting your will by claiming that you mistakenly left him or her out. This clause would indicate the exact name of the heir you wish to disinherit and explicitly state that the reason he or she is not included is that you wish to disinherit him or her. A sample disinheritance clause can be read as follows:
Example(s): 'In this will, I intentionally do not leave anything to John Doe, who is my son, because he is already provided for.'
These Nokia employees should consult their attorney if they are considering disinheriting an heir.
Tip: Do not include any detailed explanations in your will concerning why you are disinheriting your heir. A particularly negative explanation can give your heir cause to sue your estate for libel. If you wish to explain the disinheritance to your heir, leave a separate written statement with your executor.
Disinheriting a Spouse
In General
In most states, you cannot disinherit your spouse completely. If you live in a community property state, your spouse automatically owns one-half of the community property, which generally includes what either of you acquired during your marriage. In all states, spouses are protected from disinheritance by allowing a spouse to claim his or her statutory share, also known as 'electing against the will.' A statutory share can run anywhere from one-quarter to one-half of an estate, regardless of the terms of the will.
Example(s): Bob's will leaves all of his property, totaling $1 million, to his secretary, Paula, and nothing to his wife of 30 years, Sharon. If Sharon is content with no inheritance, the court will honor the terms of Bob's will. However, if Sharon wants to contest the will, she can claim her statutory share, which will be anywhere from one-quarter to one-half of the $1 million that Bob left to Paula. Paula will receive what is left after Sharon receives her statutory share.
Pretermitted Spouse
The pretermitted spouse statute protects the surviving spouse of a marriage that was not contemplated by the testator during the execution of the testator's will. In many states, marriage revokes a will, and the testator's property passes by intestacy as opposed to under a will executed before marriage. In states where marriage does not revoke a will, the statute commonly provides that the pretermitted spouse is to receive the share that he or she would have received had the testator died intestate. However, a surviving spouse may not be allowed to take under the pretermitted spouse statute if:
- It appears that the will was made in contemplation of the testator's marriage to the surviving spouse (e.g., it is stated in the will)
- The will expresses the intention that it is to be effective notwithstanding a subsequent marriage by the testator, or
- The testator provided for the spouse in a transfer that was outside of the will, with the intent that the transfer be in lieu of a testamentary provision, which is shown by the testator's statements or is reasonably inferred from the amount of the transfer
Example(s): John executes a will prior to marrying his wife, Joan. Assume that they both live in a state where marriage does not revoke a will. John dies without ever updating his will to include Joan. Joan could argue that she is a pretermitted spouse, since John did not contemplate the marriage when he executed his will. As a pretermitted spouse, Joan would be entitled to receive what she would have received had John died intestate (without a will). However, when Joan goes to court to contest John's will, the court could rule that Joan is not a pretermitted spouse if John's will contained a clause that expresses John's intent that the will was to be effective notwithstanding a subsequent marriage.
Tip: These clauses are sometimes viewed as against public policy.
Tip: For any Nokia employees who want more information, see Uniform Probate Code section 2-301, which is the law in some states but not all.
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Disinheriting a Child
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In General
While you have the right to disinherit a child, that right is severely restricted by laws that grant certain inheritance rights to minors and protect children of any age from accidental disinheritance. In the case of accidental disinheritance, a child can claim that he or she is a pretermitted child. Some states allow only a child who is born or adopted after the will was executed to receive an inheritance (take) as a pretermitted child. Other states allow a child who is born or adopted either before or after the will is executed to take as a pretermitted child. In either case, a pretermitted child is generally entitled to receive what he or she would have received had the decedent died intestate.
Example(s): John, a resident of State X, has a son named Jack. John later executes a will that leaves nothing to Jack. State X allows only children who are born or adopted after the will was executed to take as a pretermitted child. When John dies, Jack argues that he was accidentally left out of John's will and that he wishes to take as a pretermitted child. However, since Jack was born before the will was executed, he is not entitled to take as a pretermitted child.
Example(s): As another example, John, a resident of State Y, has a son named Jack. John later executes a will that leaves nothing to Jack. State Y allows children who are born or adopted either before or after a will was executed to take as a pretermitted child. When John dies, Jack argues that he was accidentally left out of John's will and that he wishes to take as a pretermitted child. Even though Jack was born before the will was executed, he is entitled to take as a pretermitted child. He receives what he would have received if John died intestate.
Are There Any Alternatives to Disinheritance?
If the reason you want to disinherit someone is that you think they might squander their money, you may want to consider leaving that person an inheritance trust. When you die, the money you leave to your beneficiary in an inheritance trust will pass directly to the trustee. The trustee then manages the money and pays your beneficiary the income. You can even include a motivation provision in the trust document. This provision allows the trustee to terminate the trust and give your beneficiary his or her share of the inheritance outright, as long as your beneficiary proves to the trustee that he or she no longer has a problem managing money.
Revising Your Will to Include a Disinheritance Clause
In General
One method of revising your will is to add a codicil, which revokes part of your will or adds a provision. However, since a codicil must be written, dated, signed, and witnessed, it may be just as easy to execute a new will. We'd like to remind these Nokia employees that when you execute a new will, you must be sure to properly revoke your old one. This can be done by including in your new will the following statement:
Example(s): 'I revoke all wills and codicils that I have previously made.'
What unique features and benefits does the Nokia Retirement Income Plan offer to its participants, and how can these benefits be maximized by current employees of Nokia of America Corporation? Additionally, what resources are available for employees to educate themselves about the various aspects of the plan, including eligibility, distribution options, and potential tax implications?
The Nokia Retirement Income Plan offers participants a defined benefit plan designed to provide financial security through retirement by supplementing Social Security and other retirement savings. Benefits can be maximized through strategies like ensuring accurate service records, understanding distribution options such as lump-sum payments or annuities, and consulting financial advisors to align these benefits with long-term retirement goals(Nokia of America Corpor…).
How does participation in the Nokia Retirement Income Plan facilitate financial security in retirement for employees, specifically in terms of pension benefit calculations and options such as lump-sum distributions or annuities? Moreover, what are some strategies that Nokia of America Corporation employees can employ to ensure they are fully prepared to utilize their retirement benefits as they transition towards retirement?
Participation in the Nokia Retirement Income Plan ensures financial security in retirement through pension benefit calculations based on service years and salary history. Employees can choose from options like lump-sum distributions or lifetime annuities. By carefully selecting a distribution option and incorporating it into a broader retirement strategy, employees can optimize financial outcomes(Nokia of America Corpor…).
With respect to changes in personal circumstances, such as marriage or divorce, what provisions does the Nokia Retirement Income Plan have to protect the benefits of employees from Nokia of America Corporation? How can employees navigate the complexities of Qualified Domestic Relations Orders (QDROs) within the context of their pension benefits, and what resources are available to assist them in this process?
The Nokia Retirement Income Plan protects benefits in cases of personal changes such as marriage or divorce through provisions like the Qualified Domestic Relations Order (QDRO). Employees can consult the Nokia Benefits Resource Center for assistance in navigating QDROs to ensure a fair division of benefits. Guidance is available for understanding the QDRO requirements and how they apply to their pension(Nokia of America Corpor…).
What steps must employees take to initiate the commencement of their benefits from the Nokia Retirement Income Plan once they reach retirement age? Furthermore, what are the important considerations employees need to keep in mind regarding the selection of a payment form and any potential impact this may have on their overall financial strategy during retirement?
To initiate pension benefits under the Nokia Retirement Income Plan, employees must submit a claim when they reach retirement age. They should consider factors such as payment form options (lump sum or annuity) and the impact on long-term financial plans. Choosing the appropriate payment form is critical to maximizing retirement income(Nokia of America Corpor…).
How can employees of Nokia of America Corporation ensure their beneficiaries are properly designated under the Nokia Retirement Income Plan, and what implications does this designation have for benefit distribution in the event of their death? Additionally, what steps should employees take to update their beneficiary designations in light of significant life events?
Employees can ensure their beneficiaries are properly designated by updating their beneficiary forms through the Nokia Benefits Resource Center. Proper designation affects how benefits are distributed in the event of their death, and it is crucial to update designations after life events like marriage, divorce, or the birth of a child(Nokia of America Corpor…).
In terms of compliance with federal regulations, how does the Nokia Retirement Income Plan adhere to ERISA guidelines concerning employee benefits, and what rights do employees of Nokia of America Corporation possess under these regulations? Also, how can employees exercise their rights effectively if they encounter issues regarding their pension benefits?
The Nokia Retirement Income Plan complies with the Employee Retirement Income Security Act (ERISA), giving employees the right to receive information about their benefits and hold fiduciaries accountable. If employees face issues with their pension, they can exercise their rights through claims and appeals, with recourse available through legal action if necessary(Nokia of America Corpor…).
How does the Nokia of America Corporation support employees who might be eligible for a disability pension under the Nokia Retirement Income Plan, and what specific eligibility criteria must be met? Additionally, what resources are available to assist employees in understanding this facet of their retirement benefits?
Employees eligible for a disability pension under the Nokia Retirement Income Plan must meet specific criteria, such as proving permanent disability before reaching retirement age. Resources like the Nokia Benefits Resource Center can provide guidance on the eligibility process and required documentation(Nokia of America Corpor…).
What specific actions should an employee of Nokia of America Corporation take when applying for a pension benefit under the Nokia Retirement Income Plan, and what documentation is typically required to streamline this process? Furthermore, in the event of a claim denial, what recourse do employees have to challenge the decision through the plan's appeal process?
When applying for pension benefits, employees should provide documentation such as proof of age and employment history. In case of a denial, they have the right to appeal through the Employee Benefits Committee. If necessary, employees can further appeal to federal courts under ERISA(Nokia of America Corpor…).
How does the pension benefit guarantee from the Pension Benefit Guaranty Corporation (PBGC) apply to employees of Nokia of America Corporation, and what are the limitations of this guarantee in protecting retirement benefits? Additionally, how can understanding these protections help employees make informed decisions regarding their retirement planning?
The Pension Benefit Guaranty Corporation (PBGC) guarantees benefits under the Nokia Retirement Income Plan in case the plan terminates. However, there are limitations, such as caps on benefit amounts. Understanding these protections helps employees make informed decisions about their retirement planning(Nokia of America Corpor…).
How can employees contact the Nokia Benefits Resource Center to gain more information about their benefits and the specific resources available under the Nokia Retirement Income Plan? What are the recommended communication channels and hours for reaching out to ensure timely and effective assistance?
Employees can contact the Nokia Benefits Resource Center through the Your Benefits Resources (YBR) website or by calling the designated phone line. It is recommended to use these channels during business hours (9:00 a.m. to 5:00 p.m. ET) for timely assistance with pension-related questions(Nokia of America Corpor…).