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Understanding No-Contest Clauses in Estate Planning
Estate planning is complicated enough. But when you have a family member who tends to take advantage of you or other loved ones, you may be considering what inheritance you plan to leave them. While you may be trying to make things fair, your loved ones may have other plans to contest the validity of your will or trust, taking more than their fair share. However, when drafting these documents, implementing a no-contest clause can deter these events from even occurring. Martin Heller Potempa & Sheppard, PLLC explains.
What is a no-contest clause?
A no-contest clause, also known as an in terrorem clause, is a statement within a legal document, such as a will or trust, that discourages anyone from contesting the will or trust. In essence, the no-contest clause creates a level of protection that if the legal challenge amounts to nothing, that person doesn’t inherit a single dime.
While some may find this harsh, ultimately you may choose to utilize the no-contest clause so that if a disgruntled family member tries to get more than their due, they lose it all. However, there can be loopholes to this.
What are the guidelines in Tennessee for no-contest clauses?
Under TN Code § 35-15-1014 (2015), the no-contest provision within a will or trust reduces or eliminates the interest of any beneficiary who directly or indirectly initiates:
- Any action to contest the validity of the document
- Any action to change the terms of the document
- Any action to challenge the acts of the trustee or other fiduciary duties
- Any other act or proceedings to defeat the settlor’s intent as detailed in the documents
A no-contest provision is enforceable regardless of the beneficiary’s good or bad faith in taking the action that would justify the complete or partial forfeiture of the beneficiary’s interest. However, a beneficiary may contest the will or trust if the following exist or are believed to exist:
- Lack of testamentary capacity
- Undue influence
- Irregularities in the execution of the document(s)
What if the contestor isn’t inheriting anything?
In cases where the individual who wants to contest a will or trust wasn’t left with any inheritance, the clause really holds no meaning to them. This is because if he or she contests the will to say they should receive some portion of the estate, they will either get something if the will contest is found valid or still get nothing if the challenge is found to be without merit.
No-Contest Clauses in Tennessee Estate Planning: Martin Heller Potempa & Sheppard, PLLC
The Nashville wills contest lawyers at Martin Heller Potempa & Sheppard, PLLC have been helping families draft wills and estate planning documents to ensure that the right family members are accounted for in their end of life wishes. However, when you fear someone may try to take advantage of your good nature or create problems for the executor of your estate, you may need a no-contest clause.
We understand how hard these decisions can be and work hard to make sure the process goes smoothly and without much stress when creating the no-contest clauses. If you are in need of legal advice in your estate planning process, contact us today.
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