What You Should Know About No-Contest Clauses

 Posted on February 28, 2019 in Estate Planning

When a person dies, the impact of the death can be great on the person’s surviving family members and friends. The emotions associated with a loss—especially one caused by a premature death—can make a grieving survivor act in uncharacteristic ways. Such behavior can lead to disputes over all sorts of matters, including the terms of the deceased person’s will. A battle over inheritances can be devastating to a family, and the resulting scars can last for years, if not forever. If you are currently drafting your will, you may want to think about including a no-contest clause to reduce the chances of such problems after your death.

What Is a No-Contest Provision?

No-contest clauses are also called in terrorem provisions, which is Latin for “by way of threat.” In essence, no-contest clauses threaten any named heir who contests the will, and they are used to discourage family in-fighting after the death of the will’s creator. Most no-contest clauses hold that an heir who formally contests the will automatically forfeits the portion of the estate that was originally intended for him or her. Sometimes, a no-contest clause might reduce the inheritance of a heir who challenges the will to $5 or another nominal amount.

The basic idea is that if that if the possibility exists that the heir will receive nothing, he or she is more likely to accept the original terms of the will, even if they are not to the heir’s liking. Keep in mind that a no-contest clause cannot stop a will contest from being filed. It can only affect what might happen after the contest.

Challenges Are Still Possible

If you are thinking about including a no-contest provision in your will, it is a good idea to talk about your situation with an estate planning attorney first. In order for a no-contest clause to be effective, the amount of each heir’s inheritance needs to be enough to create a deterrent. For example, if you have 20 named beneficiaries who will each inherit $5,000, one of your heirs might be inclined to risk his or her share in an attempt to get more. If you only have three named heirs, and each will receive $100,000, however, a no-contest clause is likely to be more effective in preventing a fight.

It is important to understand that a no-contest provision can be set aside if the challenge to the will is brought in good faith. For example, if you are an heir in a will with a no-contest clause, but you believe the will was signed under undue influence or by fraudulent means, you could contest the will and ask the court to invalidate the document. Assuming the previous version of the will also had a no-contest provision, it would not unreasonable for the court to set aside the no-contest clause because you were acting in good faith. If you are found to be acting only in your own best interests, however, the no-contest provision may be upheld.

Contact a DuPage County Estate Planning Lawyer

To learn more about no-contest clauses or any other element of estate planning, contact an experienced Lombard wills and trusts attorney. Call 630-426-0196 for a confidential consultation at A. Traub & Associates today.

Sources:

https://www.livingtrustnetwork.com/estate-planning-center/last-will-and-testament/what-the-experts-say/estate-planning-no-contest-clause-in-your-will.html

http://ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075500050HArt.+VIII&ActID=2104&ChapterID=60&SeqStart=10100000&SeqEnd=10400000