The purpose of a no-contest, or In-Terrorem, clause in a will is to deter a lawsuit challenging the will. If the person making a will sees potential red flags such as tensions between beneficiaries, he or she may want to include a no-contest clause to minimize the chance of future conflict.
A no-contest clause provides that if a beneficiary challenges the terms of the will, he or she will lose their share of the estate. The possibility of losing their inheritance will make many beneficiaries think twice before challenging a will.
Different states treat no-contest clauses differently. In New York, a no-contest clause is given full effect under the rationale that a Testator should be allowed to protect his or her estate plan. This means that if a beneficiary challenges a will with a no-contest clause, the court will give effect to the specific language of the no-contest clause and the challenging beneficiary will not receive his or her inheritance. However, there could be circumstances when no-contest clauses are not enforced. In New York, a no-contest clause is not enforced in the following circumstances:
1. If the claim is that the will is forged;
2. If the claim is that the will was revoked by another will, and there is probable cause for the contest;
3. If the contest is filed on behalf of an infant or person who is incompetent. In these instances the actions will be taken by a third party, and therefore, the infant or incompetent does not forfeit their inheritance;
4. If the challenge is a construction proceeding to determine how the will should be interpreted. In New York, the courts view a construction proceeding not as a contest, but as an attempt to clarify the will and determine what interests the will creates; and
5. If the challenge is an objection to the jurisdiction of the court. New York courts see this as a challenge to where the will should be probated, and not a challenge to the will itself.
A no-contest clause may put a beneficiary in a tricky situation. One may believe that there is a legitimate problem with the will, but may be scared to contest the will or further investigate. In New York, there are several “safe harbor provisions” which allow a person who is considering contesting a will to examine certain evidence. Typically, a no-contest clause will not prevent a person from examining:
1. The person who prepared the will;
2. The witnesses who attested to the will;
3. The will proponents; and
4. The nominated executors.
However, some no-contest clauses anticipate this type of behavior and may be drafted to preclude this sort of inquiry.
The effect of a no-contest clause may depend on whether the facts fit one of the exceptions listed above, or on whether the behavior of the person considering contesting the will falls into one of the safe harbor provisions. No-contest clauses can be an effective way to ensure that the administration of an estate goes smoothly, without disagreement among the heirs. However, there may be some legitimate reasons to contest a will such as testator’s capacity or undue influence.
If you would like to create a will with a no-contest clause or if you are considering contesting a will, it is important to consult with an experienced New York Estate Planning Attorney to determine how a no-contest clause can affect you.
