Is a No-Contest Clause in Your Will or Trust Enforceable?
Wills and trusts should be carefully drafted to express your final wishes clearly and explicitly. But even the most well-prepared documents can be subject to lengthy and costly challenges during probate and other legal proceedings. One way you can try to avoid such disputes is by including in your will or trust a provision that penalizes beneficiaries who contest its terms. However, these clauses are enforceable in Arizona only in certain circumstances.
A no-contest clause — also known as an “in terrorem clause” — generally prohibits the challenger of a will or trust from receiving what they have been bequeathed. Simply put, by contesting the will or trust in whole or in part, the beneficiary forfeits any right to the property at stake.
However, Arizona law places a heavy restriction on the enforceability of a no-contest clause — namely, that it cannot serve to penalize meritorious challenges to a will or trust.
State statutes provide that no-contest clauses are unenforceable if there is probable cause for challenging a will or a trust. The term “probable cause” is not defined in these statutes, but it generally means there is evidence that would lead a reasonable person to believe it is substantially likely they would prevail in contesting the will or trust. Typical challenges are that the will or trust maker lacked mental competency or that someone else exercised undue influence or committed forgery or fraud. The challenger’s reliance on the advice of qualified counsel is a factor in a court’s determination of whether probable cause exists. The challenger need not prevail in the contest in order to avoid forfeiture.
In practical effect, this means a challenge based on any reasonable ground generally will not trigger a no-contest clause. But there is a significant catch. Depending on how exactingly the no-contest clause is drafted, probable cause might have to exist for every claim raised by the challenger. If just one claims fails to meet that standard, it is possible that the challenger forfeits all their rights under the will or trust.
Contact a knowledgeable Phoenix attorney today
If you are considering a no-contest clause for your will or trust, it’s essential to consult with an experienced estate planning attorney who can advise you on how best to further its enforceability. Jeffrey P. Hall, PLLC assists clients throughout the Phoenix metropolitan area with all aspects of preparing wills and trusts. To schedule a consultation, call 480-409-5174 or contact us online.