If you are drafting an estate plan, you may be worried that someone else is going to challenge that plan. You are concerned that this is going to lead to disputes between beneficiaries. For instance, perhaps you have three adult children, and you do not want to have them fighting over your estate after you pass away.
One option that you can use is a no-contest clause. This is designed to prevent will challenges. It does so by revoking the inheritance the person would receive if they challenge the estate plan.
A financial penalty
In this sense, it is a significant financial penalty for anyone who decides to challenge the will.
For instance, say that you have two children and you want to leave them unequal bequests. One person will get $100,000, and the other person will only get $20,000.
If the person who receives $20,000 decides to challenge the will on the grounds that assets should be split up more evenly, then they have to forfeit even that amount. They end up getting nothing, rather than increasing their share. This gives them a financial incentive to simply accept whatever the estate plan says.
This does not work in all cases. For instance, if someone challenges an estate plan on the grounds of undue influence or forgery, and it turns out that they are correct, the court may decide not to enforce the no-contest clause because there was a valid reason for that contest. But it should stop frivolous will challenges that have no real basis.
This is just one estate planning tool to consider. Be sure you understand all of your legal options when drafting your plan or going through probate.
