We live in a litigious society. Unfortunately, even family members sometimes file lawsuits because they are dissatisfied with what their parents or loved ones leave them in a will or trust. Some are so disgruntled that they decide to contest or challenge the validity of a will or trust, which can delay its administration for years and result in thousands of dollars in legal fees. If you are concerned that any of your beneficiaries may seek to challenge your will or trust, a no-contest clause might be one method you can use to discourage them from pursuing this course of action.
What Is a No-Contest Clause?
A typical no-contest clause provides that a beneficiary who disputes the validity of a will forfeits any inheritance or benefit they otherwise would have received according to its terms. It will not prevent someone who is not a beneficiary named in your will or trust from contesting it though.
Are They Enforceable?
In Texas, no-contest clauses are enforceable unless the will contestant shows that he or she had “just cause” for contesting the will and that the will contest is in good faith. The goal is to discourage will contests that are not brought in good faith (for example, a person might threaten a will contest in the hopes that the rightful beneficiaries would be willing to settle for an amount less than the cost of defending the will contest), but to allow contests for legitimate reasons, such as a forgery, or when a purported will is executed by an incapacitated person or a person who has been unduly influenced by another.
What Are the Pros and Cons?
These types of clauses have some advantages as well as some disadvantages, as listed below:
Pros of a no-contest clause
- Honors your right to give your property to the parties you have chosen in the way you want, as expressed in your will or trust
- Discourages baseless challenges to a will or trust by a disgruntled beneficiary
- Discourages meritless lawsuits aimed at forcing a settlement by a dissatisfied beneficiary
- Avoids lengthy and expensive litigation that will deplete your estate and delay administration
Cons of no-contest clause
- Causes a beneficiary to suffer a forfeiture of his or her inheritance for enforcing his or her right to challenge the will’s validity
- Impedes the court’s ability to determine if the will or trust is valid and ensure that it was not executed as a result of unlawful means, for example, where an unscrupulous child convinces an elderly parent with dementia to sign a new will beneficial to that child shortly before the parent’s death
Create an Estate Plan That Keeps the Peace
If you see trouble brewing and are concerned that family members could contest your will or trust, a no-contest clause is one tool that could discourage dissatisfied beneficiaries from seeking to have it declared invalid. Another possibility that could forestall a will or trust contest is to conduct a family meeting during which you can explain your reasons for distributing your money and property in the way you have. An experienced estate planning attorney can help you create an estate plan for your unique circumstances and to employ all available tools, including a no-contest clause, to decrease possible conflict within the family
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