No-Contest Clauses In Your Will — Useful, But Tricky, Legal Tools
One of the biggest risks that anyone faces when writing a will is that someone will contest it. A will contest can delay distribution to heirs, drain the estate for legal costs, and even see the will set aside entirely. How can you reduce the likelihood that your will is contested once you're gone? One tool that could work is a no-contest clause. How does this work? What downsides does it carry? And when might you deploy one? Here are some answers to your questions.
What Is a No-Contest Clause?
A no-contest clause is essentially a stipulation that if any party challenges (contests) the will, they forfeit the right to receive any inheritance from it. It is generally paired with a small or moderate inheritance listed for individuals who are the most likely to contest. This provides motivation to take their bequest and walk away.
When Is a No-Contest Clause Used?
One of the most common uses of a no-contest clause is when you want to disinherit an heir. Outright disinheritance — leaving them nothing, either by omission or specifically listing them as disinherited — raises the likelihood that they will contest the disinheritance. However, leaving them a small amount with a no-contest clause can make it less appealing to challenge the will. They have little to gain.
In addition, you may want to use a no-contest clause if including something in your will that your family won't like. For example, if you reveal that you're leaving half your estate to a secret love child, a no-contest clause could prevent your other heirs from acting out in anger and shock. Similarly, bequests with strings attached can get a poor response — so a no-contest clause discourages heirs from trying to get a better deal.
What Are the Downsides of No-Contest Clauses?
While this clause sounds like a perfect solution to many problems, it's not a cure-all. First, some states have moved to limit the enforceability of no-contest clauses. Your clause may not be effective unless the challenger has no reasonable cause to contest, for instance.
Secondly, a no-contest clause is likely to create bad feelings among heirs or towards the one who wrote it. In attempting to reduce legal drama, you may set the stage for family drama instead. If this could be the case, there are other alternatives to consider, such as using a trust which transfers outside of the probate process.
Where Should You Start?
Ready to see if a no-contest clause could solve your inheritance issue? Start by meeting with an experienced wills attorney in your state today to learn more about them.
For more information, contact a wills attorney near you.