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Defining the No-Contest Clause
Defining the No-Contest Clause: What it Means and Why it is Used
One common element of a will or a trust is a “no contest clause.” This is a well known, but also a somewhat misunderstood term. We include a no contest clause in order to discourage frivolous and time-consuming challenges to a will or trust. The clause usually states that any of the beneficiaries or designees who challenge the validity of the document will forfeit their share of the estate.
Using a no contest clause can motivate heirs who are disappointed to accept the will or negotiate instead of forcing a battle in court. If you are writing a will or trust that you believe may be received badly by the heirs, it is important to list beneficiaries who might contest the document and list their exact bequests. It stands to reason that they have to have a well defined inheritance, literally something to lose – in order to be convinced to drop any challenge.
The no contest clause only applies to a direct challenge to the document. Direct challenges are calling into question the deceased’s state of mind or even that the document is fraudulent. For example if an heir is questioning their share, and think they are entitled to more of the assets, they must prove in court that their parents were not of sound mind when they made the will, or that they were under undue influence of another party.
There are several forms of the no contest clause, one simpler and one more complicated that defines the term “contest” more completely. They generally follow this form:
The gifts in this, my Will, are made on the express condition that none of the beneficiaries shall oppose or contest the validity of this Will in any manner. Any beneficiary who contests the validity of this Will or in any way assists in such an act shall automatically forfeit whatever gift he or she would have been entitled to receive under the terms of this Will.
Each state has laws governing the use of no-contest clauses, and some states don’t allow them at all. A well drafted no-contest clause will take into account your goals as well as your home state’s laws. No-contest clauses apply to legal proceedings including negotiations to alter a will or a trust.
Since the no-contest clause only applies to direct challenges to the document, it does not apply to challenging the actions of the personal representative or the trustee. If the proceedings are taking an inordinate amount of time, or the personal representative is not communicating with the heirs, it is perfectly acceptable to question them. That person should be acting in the best interest of all parties involved, and this is not a challenge to the document.