‘No contest’ clauses not bulletproof

A “no contest” clause is a provision in a lot of estate documents that automatically disinherit anyone who challenges its terms. The purpose is to scare people out of bringing lawsuits claiming that the will or trust doesn’t reflect the creator’s real wishes.

But a recent Massachusetts case shows that these provisions won’t necessarily bar all challenges. In that case, the mother of two adult siblings created an estate plan that distributed what one sibling thought was an unreasonable share of the family assets, which included significant wealth from a multimillion-dollar family ice cream business and valuable real-estate holdings, to her brother and his kids.

The sister challenged the plan in court, claiming that as their mother began to decline mentally and physically, her brother took advantage of the situation, manipulating their mother into gifting him 50 percent of the real estate interests and making him and his children the beneficiaries of her retirement and bank accounts. She also claimed that the brother convinced their mother to leave him the family home and a vacation home in a posh Cape Cod beach town, assets the mother had allegedly promised to the daughter.

The brother argued that under the “no contest” clause in their mother’s estate documents, the very act of challenging the estate automatically disinherited his sister, making her a non-beneficiary with no legal standing to pursue the case.

But a Massachusetts trial judge disagreed.  He concluded that if the sister pursued the challenge in court and lost, she’d be disinherited. But she could decide whether to take that risk, leaving her free to pursue the case. After all, said the judge, the no-contest clause itself could have been a result of the brother’s undue influence on the mother, in which case it would be void in the first place. Now the sister has the opportunity to try and prove exactly that and more.

The law, of course, may differ from state to state, so talk to a lawyer where you live.

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