5 Things to Know about a “No-Contest” Clause
- Last Will and Testament Basics
A Last Will and Testament is a legal document that lets you make specific or general gifts of your estate assets to be distributed after your death. The primary incentive for leaving behind a Will is to let you control this distribution of your estate, rather than letting someone else (the State) decide how your assets are distributed.
- What is Probate?
After your death, your estate will need to go through the legal process known as probate. Although probate serves several purposes, authenticating your Will is one of the most important functions. Shortly after your death, the person named as Executor in your Will should submit an original copy of your Will along with a petition to open probate to the applicable court.
- What Happens if Someone Contests my Will?
After your Will has been submitted for probate any “interested person” can file a Will contest. An interested person means a beneficiary under your current Will or a previous Will, a legal heir, or possibly a creditor. Although a Will contest must be based on a challenge to the legal validity of your Will, a contestant’s underlying motivation is often based on a displeasure at the inheritance he/she received (or did not receive) under the terms of the Will.
- What is a No-Contest Clause?
A no-contest clause, also known as an “In Terrorem Provision” is a clause you can include in your Will that disinherits any beneficiary who tries to contest the Will. For a no-contest clause to be effective, the beneficiary must stand to lose something if he/she chooses to pursue a Will contest and the court must enforce it. For example, imagine your estate is worth $5 million and you have two children. You want to leave your entire estate to one child, a choice that you may fear will spur a Will contest. To discourage your other child from pursuing a Will contest you leave him/her $500,000 – a decent inheritance but considerably less than half the estate which he/she would be entitled to if your Will is invalidated – and include a no-contest clause in your Will.
- Will a No-Contest Clause be Enforced?
No-contest clauses are governed by state law. Not all states recognize no-contest clauses and those that do impose varying restrictions on them. The State of Texas recognizes no-contest clauses. If a contest is brought in “good faith,” a court may choose not to enforce the no-contest clause.
If you have additional questions or concerns about”No-Contest” Clauses, contact an experienced Texas estate planning attorney at The Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your free consultation today.