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How Does a “No-Contest” Provision Work?

Bigstock-Financial-consultant-presents--14508974Sometimes a crisis can bring out the best in people. At other times, it brings out the worst. When a will is read, especially if it’s the first time that the family learns what the deceased had planned, there can be resentments that last for generations.

Avoiding family fights because of inheritances can sometimes be avoided, by calm conversations long before the will is read. Sometimes, even that doesn’t help. When one family feels slighted, it can set off feuds and even fistfights.

Wealth Advisor’s recent article, “How to Protect Your Will From Legal Challenges,” explains that unfortunately, a similar scene can also play out in real life,  if you fail to make proper provisions.

However, with some planning, you can avoid these kinds of disputes—or at least minimize the risk of your will being contested by your loved ones.

Before you (and your spouse, if married) consider your will and your comprehensive estate plan, discuss estate matters with close family members who likely will be impacted. Give them a rough outline of your plans for the disposition of your assets and other important topics. These types of conversations can eliminate potential problems and better prepare your heirs. It will also avoid a dramatic “shocker,” like those seen on the big and small screen.

While there are no guarantees, review these ways to bulletproof your will from a legal challenge:

A no-contest clause. This is also known as an “in terrorem clause.” It says that if anyone named in your will challenges it, he or she is excluded from your estate.

Witnesses. Use witnesses who know you well, like close friends or business associates because they can state convincingly that you were of sound mind when you made out the will.  You should also select witnesses in good health, preferably younger than you are and easily located. You can also add extra witnesses for more protection.

A physician’s note. A doctor’s note about your health status is recommended, if you’re extremely ill or elderly. This can declare that you have the requisite mental capacity to make estate planning decisions, which can be useful in addressing legal challenges. Get the physician’s note near to the time that the will is signed.

You could also want to videotape yourself reading your will. Speak with your estate planning attorney to learn how your state laws govern this. It could turn out to be another layer of protection for loved ones. However, if it shows signs of incompetency or undue influence, it could backfire.

Reference: Wealth Advisor (August 12, 2019) “How to Protect Your Will From Legal Challenges”