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Saturday, January 23, 2021

If my ex-husband waives his inheritance, will his children have a claim to it?

Here is another interesting question asked by a reader. I chose to share this one and comment on it in a separate thread because it's a question I hear a lot. The key to this entire question is the word "waive". Here is the reader's question followed by my comments:

"Most likely my ex-husband will waive his inheritance when his mom dies however he has 2 brothers. Would my children then have a claim to the inheritance? Would they need a lawyer?"

If your ex-husband waives his inheritance, he is stating to the executor that he wants nothing to do with it. Period. He cannot then decide who gets it instead of him. Legally, when someone waives an inheritance, the executor must proceed as if that person had died before the testator. In other words, the executor would have to act as if your ex-husband had died before his mother.

The will may state that in the event of your ex-husband passing away, his share would go to his children. Legally, that should stand up, but of course the will could say something very different. However, even if the wording does favour a gift being handed down to your children, my concern would be whether the executor would know how to proceed and whether other beneficiaries would put up a fuss about it. Most executors are rookies and will not have any knowledge of what to do when a beneficiary wants to waive his share. I would anticipate delays and possible additional costs while the executor figures it out.

My preference, always, is to try to keep people out of disputes and out of court. My suggestion would be that if your ex-husband does not want his inheritance but he DOES want his children to have it, he should not waive it. Instead, he should provide the executor with a Direction to Pay that basically says instead of paying the funds to him, to pay them to his children instead.

The difference is that with a waiver, your ex-husband has zero say in what happens to his inheritance after he waives. With a Direction to Pay, he maintains rights to his inheritance and simply asks the executor to write different cheques on his behalf. I realize that because he is your ex, you may not have any opportunity to discuss this with him or to advise him on how to handle it. If he does simply waive his inheritance, you will have to rely on the wording of the will and the competence of the executor, and hope that there is no need for direction from a judge. Most likely your children would end up hiring a lawyer.

This is a very important distinction in law. I am often asked whether a person can waive an inheritance so that their children can have it instead. Unfortunately, the word seems to mean something to people in plain English that it just doesn't mean in estate law. 

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