"No Contest" Clause Might Keep Your Estate Out of Court

I had a request a couple of days ago from a couple that wanted to put in their Wills that if anyone brought any actions against their estate that they would be excluded from the Will. These types of "no contest" clauses (also known as "in terrorem" clause, or "penalty" clause or "will forfeiture" clause) are generally permitted if worded properly.

In a 2006 Louisiana case, a man left a bequest in his Will to a trust, but stated that if any "named legatees should contest any provision in this will, then the naming of that person in my will shall be struck and they shall not be considered to be a legatee."

The court ruled that since, technically, a beneficiary of a testamentary trust is not a "named legatee," the beneficiary was not bound by the in terrorem clause.

This is a good example of how "one word" in a Will can have significant effect on your estate.

PAR