Can A No-Contest Clause Avoid A Will Contest?
None of us want to imagine family members fighting over what they are left in our estate, when we are gone. There are a number of ways to avoid this kind of fighting, some which are legal, and some of which are just plain common sense, but regardless of any of these methods, there is one pretty drastic method that can avoid a dispute: The no-contest clause.
What is a No-Contest Clause?
A no-contest clause in estate documents is a clause that says that if someone challenges your will or your trust, and that person loses, he or she gets nothing from your estate. Challenging your estate plan means that the challenger risks losing everything.
The purpose of a no-contest clause is to discourage people from challenging your estate plan. Some states have outlawed no-contest clauses, but they continue to be valid and enforceable in California.
What No-Contest Clauses are Enforceable
That said, these clauses tend to be discouraged by courts, which see them as denying people access to the courts. Courts recognize that sometimes, someone’s intentions are not made clear in estate plans, and a punishment of complete forfeiture of all inheritances is a harsh penalty for someone who initiates a court action just to determine what the deceased’s intentions may have been.
In California, no-contest clauses are enforceable, in the following situations:
- When someone challenges a will or estate document on the grounds that the maker was incompetent, incapacitated, a result of duress, or that the documents were forged or otherwise not properly executed
- When someone challenges that the transferor (the deceased) actually owned the property in the first place
There is one exception to enforcement of a no-contest cause. If someone challenges a will but they have “probable cause” to do so, the no-contest provision may not be applicable. In other words, no-contest provisions generally will only apply to challenges that are found to be frivolous, or without merit, or without probable cause.
Although there are certainly no shortage of completely baseless claims, most challenges to estates will involve some basis or have some cause behind them. That means that your no-contest clause may not be the most effective way of avoiding estate challenges–although it can help avoid baseless, frivolous challenges by vengeful, spurned potential beneficiaries.
Other Problems
Another problem with no-contest provisions is that for them to actually have any force, the challenger to the estate must actually lose. That means going all the way to trial. Many challengers will contest a will, and some settlement will be made, just to avoid the time and uncertainty of court litigation.
No-contest provisions are also only effective against people who are named to receive something in your will or trust. The penalty for losing is being cut out of the estate plan. So a person you intentionally cut out of your will or trust will not be penalized by a no-contest provision even if they lose.
Other Solutions May be Better
There are other ways to avoid family or beneficiaries challenging your estate documents. They include things like using trusts, payable-on-death accounts, or life insurance policies. A good estate planning attorney can help you with strategies that you can use, to avoid a will contest and infighting amongst your family and beneficiaries.
Call the Torrance estate planning attorneys at Samuel Ford Law today to discuss creating an estate plan that minimizes the chances of family infighting.
Source:
leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=21311&lawCode=PROB
