What is a “no-contest” clause?
A no-contest clause is a provision in a will or trust that threatens to disinherit a beneficiary of the will if that beneficiary challenges the terms of the will in court. In other words, if you create a will and subsequently pass away, your beneficiaries will be unable to challenge the decisions you made in drafting your will. These clauses are helpful in discouraging your heirs from fighting over your estate after you are gone.
Example of a “no-contest” clause:
Robert and Mary Smith are married with two children, John and Rachel. The Smith’s have a joint revocable trust that contains a no-contest provision. In this trust, Robert and Mary have left one quarter of their assets to John, one quarter to Rachel, one quarter to their church, and one quarter to Mary’s sister, Jane.
At the time that Robert and Mary create their trust, their children are in a long-standing argument with Jane. Robert and Mary want to ensure that their wishes are respected and that their estate is divided equally among all four beneficiaries without argument, so they decide to include this no-contest provision in the trust.
In this case, the no-contest clause protects the Smith estate against fighting among beneficiaries because it discourages John and Rachel from attempting to reduce Jane’s share and vice versa. Furthermore, Mary and Robert can have the peace of mind that their passing will not create further strife among their family members.
A no-contest clause is not the right option for every situation, so it is important to consult a competent attorney who can help to evaluate your personal circumstances. You should carefully consider the dynamics of your family in conjunction with your goals for your estate in order to create a solid plan.