One way to defend a claim is to let your personal representative or trustee defend your choices. A second way is to include a no-contest clause that disinherits all claimants if they lose their challenge or for even filing the challenge in the first place, explains Kiplinger’s recent article entitled, “What Do No-Contest Clauses Have to Do With Undue Influence?”
A no-contest clause can be a powerful deterrent for a beneficiary who believes they are entitled to more than the share provided, if they know that simply filing the challenge will forfeit even that share. However, it isn’t a deterrent for a relative omitted from the estate plan. Ask an experienced estate planning attorney drafting your estate plan to add these typical terms to your document:
- To omit all heirs at law not specifically mentioned in the document.
- To revoke the share provided for any person seeking:
- To claim a share of your estate, to increase their share, or to claim certain assets in your estate;
- To invalidate your document or any provision in your document or
- To take any part of your estate in a manner not specifically described in the document.
Many no-contest clauses will treat a challenger as having predeceased you (or having predeceased you, leaving no issue), thereby passing their share according to other terms in the document. However, note that some states include a specific direction as to what happens to their forfeited share.
Not all states treat a no-contest clause the same. Some states refuse to enforce them as a matter of public policy, and some strictly construe the no-contest clause because they disfavor any forfeitures. In these states, an overly broad or vague provision may be voided.
Other considerations may weigh against enforcing a no-contest clause, and you should consider these if you want to tailor your no-contest clause or exclude it from your documents:
- Allowing a court to determine the fairness of a challenge that may protect your intentions.
- Revealing any undue influence that depleted your estate or impacted your decisions if you were wrongly isolated from family or subjected to financial or personal abuse by a caregiver or relative.
- Avoid punishing a proper challenge brought in good faith by excluding any petition or suit brought by a person:
- Only seeking more information about your estate;
- Seeking documentation of expenditures by a caregiver or relative in charge of your finances before you died;
- Seeking the court’s interpretation of your last will or trust instruments;
- Seeking to deny the probate of a last will drafted and executed under questionable circumstances or
- Filing an appearance to question the appointment of the personal representative or the purported state of residence.
Reference: Kiplinger (Sep. 1, 2023) “What Do No-Contest Clauses Have to Do With Undue Influence?”
