A “No-Contest” Clause—the Nuclear Option for Your Will or Trust

No one wants their family or other beneficiaries to fight over their estate. But sometimes they do. It can be very frustrating, and expensive, and delay-inducing for all involved. One way to try to avoid a fight over your estate is to put a clause in your will or trust known as a “no-contest” clause. A typical kind of no-contest clause provides that if a beneficiary challenges the validity of the will or trust, or the terms regarding who is to receive particular benefits, or certain actions of the executor or trustee, then that beneficiary is disqualified from receiving whatever benefits they stood to receive through the will or trust. It is like a “nuclear option” for estate planning.

The thinking behind such a clause might go like this: “I want my estate to be a source of joy and good memories for my family and beneficiaries, not the opposite. It’s my right to say how I want my assets to be distributed after my death, and I’ve made that decision. No one should challenge that and say I should have made a different decision. So, as a way to avoid disputes over my estate, I’ll provide that anyone who challenges what I’ve decided won’t be included. That will probably avoid any disputes, and if it doesn’t, then the person challenging what I’ve decided doesn’t deserve to be included.”

I don’t do estate planning. In my firm, others do that. I work with people who find themselves in legal disputes, advising them of ways to get the dispute resolved in a satisfactory way. Over the years some of them have been beneficiaries of wills or trusts, but have a dispute about the estate. In some of those disputes the will or trust had a no-contest clause. So they had to take that into consideration in deciding what to do about the dispute.

In general, the law allows people very wide latitude in determining what happens to their estate after they are gone. So, in general, Kansas law enforces no-contest clauses. But no-contest clauses can be dangerous, and can even be instruments of injustice.

Here’s one example of that. Jane, a widow, creates a will dividing her assets equally between her children, and puts a no-contest clause in it. She gives her children a copy so they know what to expect. Years later she starts to lose her mental capabilities and becomes susceptible to influence from other people, especially a man who has taken an unusual interest in her. Upon her death her children are shocked to learn that she had amended her will to give half of her assets to that man and the rest to her children. They believe it was the result of improper undue influence by that man at a time when their mother’s mental capacities were diminished. The children think their mother (in her right mind) would have wanted them to challenge the validity of the amendment to her will, but they don’t want to lose the rest of their inheritance by operation of the no-contest clause. So, should they just let the amendment go unchallenged and accept that they have lost half their inheritance to that man?

The possibilities for questionable, or shady, situations are endless.

So Kansas law puts some restraints on these clauses. It will refuse to enforce a no-contest clause if the beneficiary had “probable cause” to challenge the will or its provisions. That’s good. But it often leaves a big gray area as to what the court would consider to be probable cause. Certainly if a beneficiary wins a challenge that would demonstrate they had probable cause, and the court would refuse to enforce the no-contest clause. In theory, a beneficiary could lose a challenge to a will or trust even though the court would decide they had probable cause to make the challenge. But what a risk the beneficiary faces in making the decision whether or not to pursue a challenge.

I’ve used the common term “no-contest” clause here, but there’s a technical legal term for it—an “in terrorem” clause.  That Latin word is where we get our word “terrorism.” Terrorism is designed to induce fear in people to accomplish some purpose. Do you want to induce fear in your beneficiaries? Would that be consistent with the overall message you want to give your beneficiaries by including them in your will or trust—a message of love and care?

In my experience, no-contest clauses can effectively prevent a beneficiary from pursuing a challenge that they truly, deeply, believe in. These clauses don’t prevent disputes, and they usually don’t make disputes go away. But they may prevent beneficiaries from using the courts and legal principles to resolve the disputes. An unresolved dispute, which could be deeply dividing members of your family, could last for the rest of their lives.

There are certainly situations where a no-contest clause could be a wise part of an estate plan. There may be existing disputes or divides within a family or among beneficiaries where all possible efforts to resolve them while mom or dad is still alive have failed. Some beneficiaries may have particularly challenging personal situations or characteristics, and some way to temper their actions regarding the estate could be helpful. In situations like those, and other possibilities as well, a fear-inducing provision like a no-contest clause might be a wise addition to your will or trust.

Like everything in your estate plan, think it through carefully. Maybe it would be good for you to include a fear-inducing no-contest clause.

But I don’t have one in my estate plan.