Does a No-Contest Clause Really Work?
We’re living within an increasingly litigious culture, so perhaps it comes as no surprise that many estate plans are using a no-contest clause. Regrettably, even a family member can file a lawsuit simply because they aren’t satisfied with the amount their parent or loved one left to them in a will.
Some of these people become so unhappy that they actually choose to challenge or contest the legality of a will or trust, which often leads to costly delays that can last several years and rack up thousands of dollars in legal fees. If you feel that one or more of your own beneficiaries might attempt to question your will or trust, utilizing a no-contest clause is one technique you can make use of to discourage your own loved ones from attempting this course of action.
What Exactly Is a No-Contest Clause?
A typical no-contest clause essentially states that any beneficiary who disputes the validity of a will, forfeits any inheritance, as well as any other benefits they otherwise would have collected according to the will terms. This will not prevent a person who is not a named beneficiary in your will or trust from contesting it however.
Is a No-Contest Clause Enforceable?
In most jurisdictions, a no-contest clause will be enforceable unless a will contestant can prove that he or she had “just cause” to challenge the will and that the will contest is also in good faith. The goal here is to discourage any will contest that was not brought in good faith (for example, an individual could threaten a will contest with the goal of forcing the rightful beneficiaries to settle for an amount less than the cost of defending the will contest). You should also make considerations within your own estate documents to allow contests for legitimate reasons, such as a forgery attempt, or when a purported will is executed by an otherwise incapacitated person or a person who may have been unduly influenced by another person.
What Are the Pros and Cons of No-Contest Clauses?
These kinds of clauses have some distinct advantages, but do come with some disadvantages as well, as we’ve highlighted below:
Pros of a No-Contest Clause
- Will honors your right to give your property away to only the parties you have chosen, in the exact way you decide, as expressed within your will or trust
- Can discourage any baseless challenges to your will or trust by a dissatisfied beneficiary
- Discourages any meritless lawsuits aimed at forcing you into a settlement by a disgruntled beneficiary
- Can help avoids lengthy and costly litigation that can deplete your estate funds as well as delay administration
Downsides of Using a No-Contest Clause
- May cause a beneficiary to endure a forfeiture of their inheritance for enforcing his or her right to question the will’s validity
- May impede the court’s capability to determine if the will or trust is lawful and ensure that it was not executed as a result of any unlawful means, for instance, where a dishonest child convinces their elderly parent with dementia to sign a new will beneficial to that child prior to the parent’s death
Try to Create an Estate Plan That Keeps the Peace
If you foresee trouble in the future when it comes to your family and are concerned that someone may contest your will or trust, a no-contest clause is one of the best tools you can use to discourage a dissatisfied beneficiary from attempting to have your will or trust declared invalid.
Another possibility that could forestall a will or trust contest would be to have a family meeting during which you can explain all of the reasons you’ve chosen to distribute your money and property.
Our experienced estate planning attorneys can help you establish an estate plan that matches up with your own unique circumstances by to employing every available tool, including a no-contest clause, so you can decrease the chance that you’ll have any conflicts within your family.
Click here to read our other article on challenging a no-contest clause, or this Nolo resource on the subject, and if you have any questions, please don’t hesitate to reach out by phone at 509-328-2150.
