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Should you add a no-contest clause to your estate plans?

One purpose of New York estate plans is to minimize the likelihood and duration of estate disputes that may arise upon your death. Though you may leave behind detailed instructions that have considerations for all your loved ones’ potential concerns and needs, there is still the possibility of someone not agreeing with your final decisions. One solution that can help nip potential disputes in the bud is a no contest clause. 

It is important to understand that disputes can still arise between your beneficiaries. A no-contest clause does not automatically bar a disgruntled relative from filing a dispute. There are circumstances where a probate court may decide to allow a contest petition to proceed. Here are a few considerations about the no-contest provision for estate plans

What is a no-contest clause? 

Also known as an in-terrorem provision, this caveat serves to discourage named beneficiaries from disputing a testator’s last will and testament. It is extremely useful when there is a large inheritance at stake. 

Are there any limitations to the clause? 

Anyone can add a no-contest clause to estate plans. However, when there is a considerable amount of inheritance at stake, the beneficiary may not abide by the clause and decide to risk her or his inheritance by contesting the estate plans. It is up to probate court to decide if it will allow the petition to succeed. A no-contest clause automatically loses its power once probate court decides a dispute is valid and allows the contester to retain their ability to receive their inheritance. 

The contester can use the provision to receive lawful permission to investigate the circumstances leading to the creation of the will. She or he must have sufficient cause to do so. This is useful when there are concerns about the testator’s capacity or undue influence prior to the estate plan's creation date and the testator's death. 

Because of these loopholes, the in-terrorem provision is not the only means one should rely on when creating estate plans. However, it is a useful option to include to discourage family and beneficiaries from filing baseless disputes and protect certain beneficiaries from losing their inheritances.

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