No Contest Deterrent Effect

Although no-contest clauses are intended to discourage litigation, a no-contest clause does not, in and of itself, preclude litigation. Rather, if enforceable, it requires the beneficiary to choose between accepting the gift provided in the instrument and pursuing a claim that is a contest. Of course, if the instrument makes no gift to the beneficiary, the no-contest clause is ineffective as a deterrent because the already disinherited beneficiary has nothing to lose by pursuing the claim.

Clauses disinheriting a beneficiary that also say that if the beneficiary contests the will, he or she shall receive 1 dollar and no more likewise have no deterrent effect. A testator or settlor who wants a no-contest clause to actually deter contests must make a gift to the anticipated contestant that is large enough to provide a substantial disincentive to litigation.

Furthermore, broadly worded no-contest clauses that apply to “any beneficiary or heir” sometimes boomerang and trigger unintended consequences, forcing a favored beneficiary with a legitimate issue to remain silent to avoid risking the loss of a substantial gift (substantial because he or she is a favored beneficiary), whereas a disfavored beneficiary would face a smaller risk or no risk at all if already disinherited. Drafters should review with the client the possibility of using targeted no-contest clauses that identify by name the potential contestants to be silenced and call for a forfeiture by them only instead of using indiscriminate broad classifications.

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