POV: You create a will that you think is strong and sturdy and will stand the test of time, even when you’re gone. But… that’s not what happens. Instead, one of your beneficiaries challenges the validity of your will after you die. Yikes! What can you do to avoid this situation? You can potentially add in a no contest clause which says that beneficiaries cannot attempt to void the will after you die; otherwise, they will lose out on inheriting from you. But there’s more to it than just that…Let’s get into everything you need to know about no contest clauses and whether or not they’re enforceable.
What is a no-contest clause?
It is a clause you can add to a will that basically says if a beneficiary tries to challenge the validity of the will (or any trust created by it) in court or tries to argue that any part of the will is invalid, then that beneficiary will lose any inheritance they were supposed to receive under the will. It will be as if they had died before the person who wrote the will and had no heirs to inherit their share.
For example, let’s say that Jimmy has a will that devises his estate in equal parts to his three siblings and one child. However, he also has a no-contest clause. If one of his siblings or child challenges the validity of the will, they will no longer be able to inherit from his will.
Purpose of no contest causes
People tend to include no-contest clauses for several reasons, such as deterring any frivolous litigation, minimizing family conflict, protecting the testator’s wishes, and discouraging beneficiaries from holding up the (already really long) probate process.
Some testators may realize that their distribution of assets may upset some people and anticipate certain beneficiaries challenging the agreement. For example, if, under default law, the beneficiary gets more than they would under the will, they might be enticed to challenge a will. However, a no-contest will can help avoid this.
Enforceability of no contest clauses
Here’s the kicker: The enforceability of no-contest clauses varies by state. Courts might uphold a no-contest clause, but they might also decline to do so if the beneficiary acted in good faith and had probable cause for their challenge. In other words, no-contest clauses may only apply in a situation where the beneficiary is acting in bad faith (meaning they’re frivolously filing lawsuits to get the will thrown out).
Here are some reasons a no contest clause may NOT be enforced (meaning that the beneficiary can still inherit from the will even if they contest the will):
- Good faith exception: If the person contesting the will was acting in good faith (as opposed to bad faith) when contesting the will, courts will generally not “punish” them by enforcing a clause that says that they cannot inherit from the will.
- Probable cause: Probable cause generally means that there was evidence that could lead a reasonable person, properly informed and advised, to conclude that there is a substantial likelihood that the contest against the will would be successful. If there is “probable cause” with the contest, a court may not enforce the no-contest clause.
- No-contest clauses are interpreted narrowly: Courts generally will strictly interpret no-contest clauses to avoid taking away someone’s inheritance, but the main goal is always to further the testator’s intent.
- Public policy considerations: Some states say that no-contest clauses are against public policy because certain challenges, such as those involving allegations of forgery or undue influence, may be protected by public policy and do not trigger a no-contest clause. Another way a no-contest clause would be against public policy is the state forcing forfeiture of inheritance upon someone.
Remember, if a no-contest clause is NOT enforced, it means that the person challenging the will doesn’t forfeit the right to inherit. If a no-contest clause IS enforced, it means that the person who challenged the will cannot inherit from the will.
The law governing no contest clauses
Some states have specific statutes governing what makes a no-contest clause enforceable. For example, California has an entire section of statutes related to the laws around no-contest clauses (Cal. Prob. Code § 21310 through 21315). In some states, the law surrounding no contest clauses is primarily developed through court decisions (case law), while in others, statutes play a more prominent role.
Best practices for drafting a no contest clause
If you’re interested in adding a no-contest clause to your will, here are some best practices for ensuring your no-contest clause has the best chances of standing up in court:
- Keep the scope of the clause narrow (specifically list what triggers the disinheritance, such as seeking to void the will)
- Use clear and unambiguous language (don’t use vague terms) because courts will interpret your clause in the strictest/narrowest terms to avoid disinheritance if possible.
- Consider the enforceability of the no-contest clause in your state and how the clause will work in the real world
- If you have any questions, work closely with an experienced estate planning attorney
The bottom line on no contest clauses
The bottom line is that no contest clauses can be useful for people who want to ensure that their wishes are not contested after they are gone, to avoid family drama, and to ensure probate goes quickly. No contest clauses are generally enforceable but only in certain circumstances, like when there is not probable cause for the contest. However, what makes a no contest clause enforceable will depend on your state’s specific laws. It’s always important to seek out legal advice before adding a no contest clause to your will to ensure that you draft it properly and that you understand the ramifications of including such a clause.
Nicole Sheehey is the Head of Legal Content at HelloPrenup, and an Illinois licensed attorney. She has a wealth of knowledge and experience when it comes to prenuptial agreements. Nicole has Juris Doctor from John Marshall Law School. She has a deep understanding of the legal and financial implications of prenuptial agreements, and enjoys writing and collaborating with other attorneys on the nuances of the law. Nicole is passionate about helping couples locate the information they need when it comes to prenuptial agreements. You can reach Nicole here: Nicole@Helloprenup.com
0 Comments