No Contest Clauses: Understanding the Pros and Cons
A No Contest Clause can be a strong deterrent to those who might be considering challenging a will or trust. But, as Siedentopf Law explains, this provision may not be as all-encompassing as it seems.
What is a No Contest Clause?
Maybe you’ve heard people discussing a No Contest Clause in a will or trust and you’re not exactly sure what that is. We’d love to explain it for you!
For the purposes of estate planning, a No Contest Clause in a will or trust is included in the will or a trust to discourage heirs and beneficiaries from potentially challenging the documents after a person’s death. Typically, the clause contains language that states that whoever challenges or attempts to invalidate the will or trust will be completely disinherited. Obviously, including this No Contest Clause could be a powerful deterrent to those who may not have strong evidence to contest the will or trust.
Challenging a No Contest Clause
When a person contesting an estate plan has probable cause (reasonable grounds) to bring that claim, then the court may decide not to enforce the No Contest Clause. Probable cause exists when the person challenging the will or trust has factual information that would cause a reasonable person to believe that their claim is true—thus improving their chances of successfully proving their claim in court. For example, the probable cause might exist if there was some proof that the person had been tricked into signing a will or had been pressured into giving more to someone through undue influence, or under duress. If a person challenges the estate plan in good faith and on a factual and legal basis, the judge will not likely enforce the No Contest Clause.
There are two types of challenges, however, where probable cause is not a defense to enforcing the No Contest provision.
- If a beneficiary files a creditor’s claim (they are arguing that the estate owes them money), this can still trigger the No Contest Clause, meaning that he or she may recoup some of their money but they will otherwise be disinherited from the estate; and
- A beneficiary could challenge the transfer of property on the grounds that the property was not the decedent’s to begin with. Again, this type of claim forces the challenger to choose between their lawsuit and their inheritance.
A person considering challenging a will or trust should carefully weigh the options, as they may be risking disinheritance altogether.
Including a No Contest Clause in a will or trust
So, on the positive side, including a No Contest Clause in a will or trust can be a strong deterrent to those who might be considering challenging a will or trust. If you believe you have beneficiaries who will fight over assets, it may be in your best interest to include the No Contest Clause in an attempt to prevents this.
But alternatively, this provision may not be as all-encompassing as it seems. Those who believe they have a probable cause can still challenge the estate plan and it may not trigger enforcement of the No Contest Clause.
A skilled and knowledgeable estate planning attorney can help you determine whether or not including a No Contest Clause in your will or trust is best for you.For more information about No Contest Clauses, or if you are interested in setting up an estate planning consultation, contact Siedentopf Law at (404) 736-6066 visit our website to set up a consultation.
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