In This Edition:
- No-Contest Clauses in Wills and Trusts
- Get to Know Paralegal Ricki Roles
- Recipe Spotlight
- Complimentary Estate Planning Webinar
No-Contest Clauses in Wills and Trusts
Can a beneficiary challenge a will or trust that has a no-contest clause?
By Rachel W. Morrison, Will & Trust Litigator
In estate planning, no-contest clauses are often included to discourage or eliminate frivolous lawsuits. However, there may be valid contests that should be brought, even where the estate planning document has a no-contest clause.
What is a No-Contest Clause?
A no-contest clause, also known as an “in terrorem” clause, generally means that whoever challenges a will or trust be disinherited. Such clauses are used in estate planning instruments to discourage litigation and are usually intended by a grantor to prevent a beneficiary from contesting what the grantor decided to do. So, if a beneficiary challenges a provision of the estate instrument in court, then the no-contest clause kicks in and leads to that beneficiary losing all rights to inheritance.
Pros and Cons
Drafting an estate plan allows a person to put into writing their wishes for division of assets upon death.
Including a no-contest clause in your will has several potential benefits. It helps ensure that your estate goes to individuals and entities that are specifically identified. It lessens ambiguity because you have made it very clear to heirs and family who is to inherit. It prevents disgruntled heirs from later claiming that the grantor lacked capacity or was a victim of undue influence. Finally, attorneys will tread carefully when spotting no-contest clauses in estate planning documents because these types of clauses can have dire consequences on the client’s attempts to enforce his or her rights as a beneficiary.
However, no-contest clauses may also have unintended consequences if not carefully drafted or sufficiently explained. For example, some no-contest clauses prohibit the children of unsuccessful contestants from inheriting, which can have far-reaching effects on subsequent generations, which the testator might not have intended when they first made their estate plan. In these cases, the contestant’s share could pass to the residue of the estate, meaning the siblings of the contestant receive the contestant’s forfeited share, rather than the contestant’s own children.
Also, a no-contest clause may be unnecessary or have little to no impact on a will/trust contest. For instance, no-contest clauses are ineffective unless the contestant is named in the will/trust to receive some distribution in the first place. Accordingly, if a family member who is already disinherited by the terms of the will/trust contests the instrument, the no-contest clause will have no deterring effect on this family member. In other words, they have nothing to lose by contesting the will/trust since they already have been disinherited.
Thus, in the end, it is important for grantors to talk with their attorney about the practical consequences of a no-contest clause and whether one is needed in the first place.
Challenging a No-Contest Clause
There are several ways to challenge an estate planning document. Lack of capacity, undue influence and execution error, like improper signatures or lack of witnesses are probably most common. But for those wishing to challenge a no-contest clause, it would be wise to consult an attorney first.
Enforceability of no-contest clauses differ by state. In Oregon, for example, no-contest clauses are permitted and enforceable but with some exceptions. If the court determines that a contest is based in good faith and there is a good reason or “probable cause” for contesting (i.e., the instrument was forged, revoked or invalid), then the clause won’t prevent the challenging heir from inheriting. Oregon law states that if a person contesting an estate plan has probable cause to bring a claim, then the court may not 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 the testator had been tricked into signing a will/trust, had been pressured into giving more to one beneficiary through undue influence, or if the testator lacked capacity to execute the will/trust. If a person challenges the estate plan in good faith and on a factual and legal basis, the court is unlikely to enforce a no-contest clause.
The law provides safeguards for a person wishing to challenge a will or trust when that person has evidence that the testator was coerced or unduly influenced by a beneficiary or has proof that the testator lacked capacity when the instrument was executed. Either way, it is important to know no-contest exceptions may exist.
No-contest clauses can effectively prevent contests in certain situations, but they are not for everyone in every situation. If you have any questions about no-contest clauses, will contests, or probate litigation, please contact our law office to schedule a consultation.
Myatt & Bell, P.C. has decades of experience assisting clients in creating estate planning documents that accurately and clearly outline intended distributions of estates, while minimizing the risk of a successful will or trust contest. Additionally, and if you suspect nefarious acts surrounding a family member’s will or trust, our experienced team of attorneys is able to spot issues that may constitute probable cause to contest the estate planning document and can advise you how best to protect yourself as well as your loved ones. We are here to help.
About Us: Ricki Roles, Paralegal
What do you do just for fun? I enjoy exploring and experiencing new things, such as playing a game not yet played, watching a movie (that is new to me), or visiting new destinations.
What is the most memorable place you vacationed? Maine. Not only for its natural beauty, but also for family memories. When I was 12 years old, for example, my Nana took me to Maine. She was personal friends with Stephen King, and so we drove over to his home to say hello. I remember the house being just as grand, ornate, and creepy as one might imagine. It had wrought iron fences with wrought iron bats, gargoyles, all things my 12-year-old self thought was the coolest thing I’ve seen.
What do you do in your spare time? I love all things cooking and crafting. There isn’t a recipe I won’t try, create, and conquer (if I do say so myself!), and the same applies for crocheting anything out of yarn.
Rachel W. Morrison’s
Kabocha Squash Chips Recipe
- 1/2 medium-sized kabocha square (about one pound)
- Salt to taste
- Note: Rachel doesn’t use oil or fats, but some may wish to add 3 tbsp of vegetable oil for flavor
- Preheat oven to 375°.
- Cut kabocha squash in half and scoop out the seeds.
- Thinly slice the kabocha squash about ¼ inch thick.
- If using oil, toss the kabocha slices with 3 tablespoons of oil and lay them flat on a baking sheet in a single layer.
- Bake for about 30 – 40 minutes, flipping over halfway through.
- Remove from oven when they turn golden brown and the edges are crispy. Enjoy!
Estate Planning & Peace of Mind
Have you found yourself making excuses for why not to get your estate in order? Maybe you’re convinced that you really don’t need estate planning. If you have assets and loved ones, you need an estate plan. Having an estate plan that is right for you ensures your loved ones are taken care of and that the transition is as easy as possible.
Attend one of our complimentary estate planning webinars and see for yourself. Having your estate plan prepared and understanding the why’s behind the importance of estate planning can bring you the peace of mind you have been needing. Join us at our next Estate Planning Informational Webinar by clicking here.
From Our Clients
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The paralegal support staff headed by Jami was equally great. We were surprised by the amount of documents to be signed, but our signing appointment was well organized and and completed expeditiously.
Our estate planning was a pleasant and interesting experience. The continuing support will be greatly appreciated.” – Robert M.
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