By Ashley L. Hawley
December 13, 2021
Drafting an estate plan allows a person to put into writing their wishes for division of assets upon death. Sometimes this means making a choice to give more to one child over the other, or to completely write out natural heirs of law. An uncle whose nephew is like a son to him may bypass his brother or sister to provide for that nephew; a parent might give more to a child with special needs or a child that has been performing caretaking responsibilities. But, what happens when that brother, sister, niece, nephew, or child that receives less than the share they believe they are entitled decides to fight about it?
I commonly use the phrase “anybody can sue anybody over anything” – the real question is whether a challenge to a will or trust will be successful. One of the ways to prevent a successful challenge is to include a “no-contest” clause in your will or trust. Generally, a no-contest clause is a provision in the document that imposes a penalty for questioning the document. “If you challenge the will, you get nothing” – is a common no-contest clause.
There are several ways to challenge an estate planning document. Lack of capacity, undue influence, and execution errors (improper signatures, or lack of witnesses/notaries) are probably the most common. Challenges based on the improper administration of the estate or trust, are not typically addressed in a no-contest clause. For example, if Jane Doe is the trustee of the trust, and she’s been stealing trust assets, a beneficiary can still bring a lawsuit against Jane Doe, even if the trust contains a no-contest clause. The contest in this case is in the administration by the trustee, not the trust itself.
A “you get nothing” clause also does not help in the case where an heir is written out completely. “You get nothing” – really will not present a deterrent to someone who is literally going to receive nothing either way. In those cases, the will or trust might be thrown out, and if they win, a judge might determine they will get a share. Excluding others, such as the children/descendants of an excluded child, may provide additional incentive not to challenge the plan, and can be effective in the situation where an heir gets “something” just not an equal amount.
No-contest clauses can effectively prevent contests in certain situations, but they are not for everyone or every situation. To learn more about no-contest clauses and whether you should incorporate one into your estate plan, you should discuss with your estate planning attorney.
Ashley also explored this topic in a recent vlog.
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