One of the worst things that can happen after passing away is for your family and friends to fight over your assets. Even now, you may already see the signs that your family and friends will start to argue after you’re gone. Believe it or not, there is something you can add to your estate plan called a no-contest clause.
At Pike Law, we need to educate our clients about various legal aspects. We can explain how no-contest clauses work and how they can help you encourage your family and friends to not fight over your assets after you’re gone. If you need help planning your estate and adding a no-contest clause to your will or trust, contact our will and probate attorneys today.
What are No-Contest Clauses?
A no-contest clause is also known as an in-terrorem provision. This is a legal provision that can be included in a will or trust document, stating that if a beneficiary challenges the validity of the will or trust, they will forfeit their inheritance.
In other words, if a beneficiary contests the will or trust and is unsuccessful, they will lose their share of the inheritance. This clause serves as a deterrent for beneficiaries to challenge the document, as they risk losing their inheritance if they do so. They should only contest the will if they truly believe that there is something invalid within the will that will impact them.
How Do No-Contest Clauses Work?
No-contest clauses are typically included in wills and trusts to protect the testator’s wishes. The testator would be you, the person making the will or trust. You have it added when you’re making the will or trust.
However, it is important to note that these clauses are not always enforceable in Pennsylvania. While no-contest clauses serve as a deterrent, they are not foolproof. If a beneficiary has valid grounds to challenge the document, such as undue influence or lack of mental capacity, the clause may not be enforced.
For example, if a person provides enough evidence to doubt the trustworthiness of the will or trust, but not necessarily that anything was done incorrectly, the no-contest clause will not apply. At the same time, this is an incredibly difficult task to meet. It is always important to consult with an experienced attorney while drafting a will or trust that includes a no-contest clause.
When Should Someone Use a No-Contest Clause?
No-contest clauses are beneficial in certain situations. For example, if you have a blended family, disagreements among beneficiaries may occur due to different relationships. In these cases, the different children may fight over who deserves which asset or percentage of assets.
In this instance, you would want to ensure that your children don’t fight over their share and that the estate distribution proceeds smoothly.
Another common instance is if you had to disinherit someone. If a beneficiary has been disinherited or left with a smaller share of the inheritance than expected, they may be more inclined to challenge the document. In such cases, a no-contest clause can discourage them from doing so.
When Should Someone Not Use a No-Contest Clause?
While no-contest clauses may seem like an effective way to avoid disputes over the will or trust, there are situations where they should be avoided. For instance, if the testator is leaving unequal shares of inheritance to their children, including a no-contest clause may lead to resentment and legal challenges among the beneficiaries.
Additionally, if there is a possibility of someone challenging the document for valid reasons, including a no-contest clause may not be wise. Instead, it could result in an unnecessary legal battle that can drain the estate’s resources so that the inheritance is non-existent. In this case, it may be better to leave your inheritors to their own devices.
Contact the Estate Planning Attorneys at Pike Law For Help
No-contest clauses are provisions that can be included in wills and trusts to discourage beneficiaries from disputing the document. They can serve as a deterrent, but their enforceability can be questioned.
To make sure you’re not wasting your time trying to add one or wasting your inheritors’ time by not having one, you should consult with a knowledgeable attorney while drafting a will or trust.
Our team is available to discuss any concerns or questions regarding this matter and help our clients make informed decisions for their future and their loved ones. Contact us today for more information or to schedule a consultation.