|
Home / Legal
Estate Planning - No Contest Clause in your Will
By:Ronald Hudkins
Copyright 2006 Ronald Hudkins
There is value in the story of an older client who had seen a very interesting clause employed in a will. There was a great deal of money at stake and the many family members had little reason to love each other, because they had never met and never knew of each other’s existence. It was expected that the will would be heavily contested on several different fronts in every conceivable way. The testator realized that a truly lengthy contest would result with the bulk of his estate in the hands of people he really didn’t care for in the least: Lawyers.
In fact, that is not an unworthy consideration in a heavily contested will or long fought divorce; lawyers may end up with the bulk of the estate or marital property. The move to arbitration is one of the ways that the legal profession is trying to prevent these unseemly outcomes. The clause that this client had seen employed in his grandfather’s will was like the following, “Anyone named in and contesting this will receives the maximum bequest of $1, regardless of the outcome.” This clause meant that regardless of whether the litigant had proven undue influence or diminished capacity or fraud, they would still only receive $1 as a bequest specifically because of having brought and proven their claim. Since none of the family knew or trusted one another a great deal, this effectively eliminated potential contests.
Often testators anticipate their will to be contested and they wish to insert what is called a no-contest clause in their will. The no contest clause is exactly what this elderly client had described, because it was designed to terrorize a would-be contestor of the will into thinking twice about facing the threat of getting just a dollar rather than the sum they had been left. Such clauses are also sometimes called terrorem clauses, because they are designed to scare the beneficiaries into accepting the bequest they are given. The no-contest clause described above was executed correctly in that each relative was wisely given something in the will that was worth the fear of losing.
In drafting a no contest clause, it is important not to entirely disinherit someone or to give them a bequest that is not something that they are afraid to lose. If someone is entirely disinherited, then they risk nothing by contesting the will. If they are successful, they may be able to have the will nullified in whole or in part. That is risked when the testator decides not to give someone who would traditionally receive money nothing at all. That is a mistake, a crucial error in such a clause, where the person who might challenge is given nothing to fear losing and therefore has no reason not to contest the will with every possible means. This situation is made worse when there is a group of people who are “disinherited,” and contesting the will. When this happens, the rest of the family must wait to inherit, which may cause substantial hardship on those who have done nothing wrong and are often those who are nearest and dearest to the testator.
Many jurisdictions refuse to strictly enforce no contest clauses because they discourage valid and invalid contests alike. These states look to “probable cause” to bring the contest and, if there is any, refuse to enforce the penalty against the challenger. Furthermore, no-contest clauses are falling out of vogue legally and are being construed very narrowly by courts. Many enquires into the will are not deemed contests in the eyes of these courts, because they wish to see no contest clauses become a thing of the past.
Before deciding to insert such a clause you should ask your attorney how your state is handling them and what is likely to happen in the future. In addition, you must make sure that those whom you decide not to make a substantial part of your will and attempt to intimidate with a no contest clause are left some amount of money that they would think twice about losing.
However, there may be better ways to leave your assets to those you choose rather than that traditional will. For many reasons the living trust is the superior instrument for most people’s needs. It is important to consult your attorney to find out the best way to protect your assets and whether a will with a no contest clause is a viable option in your state. A will, in many ways, is too encumbered with restrictions that make a trust a much better option if you would like to leave your assets to those that you choose and reduce the chances of your desires being challenged. Again, as always, ask your local attorney for advice about your wishes and find out whether no contest clauses are becoming a thing of the past in your jurisdiction.
Digg
del.icio.us
Blink
Stumble
Spurl
Reddit
Netscape
Furl
Article keywords: no contest clause, will, estate, marital property, bequest, terrorem clauses, assets, living trust
Article Source: http://www.articles2k.com
About Ronald E. Hudkins; Ronald Hudkins is a retired U.S. Army Military Police member that was assigned as a staff researcher. He has coordinated with military and criminal investigators, set on court marshals and worked closely with the Staff Judge Advocate Generals Office (JAG). He has a keen sense of legal matters - their interpretation, initiatives and guidelines. For imperative financial planning needs he suggests his book “Asset Protection and Estate Planning for All Ages.” Additionally, he offers a Free Newsletter, Articles and a Financial and Tax Newsfeed at his web site: www.AssetProtectNow.com
|
|
| Top Legal Articles |
- 1). how to defer jury duty By : Phil Wiley
Let’s face it. Jury duty can be a drag, but most of all it’s not always convenient when we’re called up to service. So how can you defer jury duty?
|
|
|
- 3). The New Bankruptcy “Means Test” Explained in Plain English By : Charles J. Phelan
With the new bankruptcy law in effect as of October 17, 2005, there is a lot of confusion regarding the new "means test" requirement. The means test will be used by the courts to determine eligibility for Chapter 7 or Chapter 13 bankruptcy. The purpose of this article is to explain in plain language how the means test works, so that consumers can get a better idea of how they will be affected under the new rules.
|
- 4). Estate Planning - No Contest Clause in your Will By : Ronald Hudkins
Copyright 2006 Ronald Hudkins
There is value in the story of an older client who had seen a very interesting clause employed in a will. There was a great deal of money at stake and the many family members had little reason to love each other, because they had never met and never knew of each other’s existence. It was expected that the will would be heavily contested on several different fronts in every conceivable way.
|
|
|
|
|
|
|
|
|
|
|
|
|
| New Legal Articles |
- 1). Personal Injury Compensation Claims By : Julian Hall
Not all accidents lead to legal proceedings, however if there are no serious injuries, you may be entitled to recover damages for property and other expenses from the third party. The likelihood of legal proceedings will usually rest on the quantum, or the amount of financial damage which has ensued from the accident.
|
|
|
- 3). California Contractor License Bond By : Seth Miller
Before a contractor can receive a contractor’s license in California, the contractor must register with the California Contractors State License Board and pay a Contractor's License Bond or a cash credit.
In the event of a contractor's license getting suspended or annulled due to a breach of the Contractors License Law, the contractor must file a disciplinary bond with the CSLB.
|
- 4). Montana Child Support the Treasure State By : Holcy
Montana Child Support
How do you know if you qualify for child support? Child support is available to all single parents in need of financial assistance from the non-custodial parent. In order to receive child support services, you must first fill out an application with the state of Montana. When apply for child support, there will be a non-refundable application fee.
|
- 5). Criminal background check By : Stanley Alpin
Background checks are a useful screening and selection tool for companies. Of the many types of background checks, criminal background checks are routinely carried out by employers to ensure that they are not courting a risk of physical and mental trauma. In fact, in several states in the U.S, criminal background checks are compulsory for prospects who apply for positions in places such as nursing homes, educational institutions, and adult care centers.
|
- 6). Employment background check By : Stanley Alpin
Employment background checks are becoming increasingly common these days. The reasons for this include the fact that negligent hiring lawsuits that result from the actions of an errant employee can damage a company’s credibility and lead to hefty fines; companies have become more selective in their choice of employees following the threat of terrorist activities; accepting a resume at face value has resulted in many companies wasting time and money due to frequent hire-and-fire situations.
|
- 7). How an employee background check works By : Stanley Alpin
Over the past few years pre-employment background checks have gained significance for employers big and small. Companies can either execute the required activities in-house or can outsource them to human resource companies that specialize in carrying out background checks.
There is a lot of paper-work, co-coordination, and follow-up that goes into conducting a background check and for this reasons companies prefer to get the job done by an outside agency.
|
- 8). Is an instant background check even possible? By : Stanley Alpin
Given that there are more than 12 million illegal immigrants in the United States and that information on U.S citizens is scattered across various databases all over 3,142 counties, it is safe to conclude that an instant background check is not possible at present. Yet, there are innumerable companies that purportedly offer instant background checks.
|
- 9). What shows up on a criminal record background check? By : Stanley Alpin
A criminal record background check can throw up a lot of information on an individual including previous arrests as well as conviction and non-conviction information. The information is obtained from Federal Fugitive files, files from the Department of Corrections prison, state criminal records, databases on sex offenders, and prison parole records.
|
- 10). Offshore Trust - Effective Estate Planning, You Decide By : Ronald Hudkins
Copyright 2006 Ronald Hudkins
The creation of offshore trusts and other financial plans is a way of shielding your assets from the laws of the nation in which you reside. It can sometimes be used to remove one of the two certainties of life; taxes. Americans are far less likely than the citizens of other countries to put assets abroad because, although when you receive the benefits of being free of your country’s laws regarding assets (namely taxation) you also lose the aspect of those laws that are designed to protect your assets.
|
|
|
