One of the driving forces behind Americans establishing estate plans is to lower the possibility of conflict between beneficiaries after death. Namely, dying without an estate plan can cause your surviving children to fight over your estate. Even a well-crafted estate plan can invite conflict.
One way of lowering potential conflict is by introducing a no-contest clause into your will. A no-contest clause stipulates that if a beneficiary challenges an estate and loses the challenge, then that beneficiary will not receive an inheritance. According to the American College of Trust and Estate Counsel, the State of Michigan will enforce no-contest clauses.
How does a no-contest clause work?
Estate planners put no-contest clauses into wills to act as a deterrent. If you decide that you wish to distribute your estate unequally, a no-contest clause may be necessary. Usually, a no-contest clause will cause a belligerent beneficiary to, at minimum, carefully consider whether or not challenging the will is worth disinheritance.
Are no-contest clauses infallible?
No. Just because you insert a no-contest clause into your will does not mean that your estate is beyond legal challenge. It is still possible for a dissatisfied beneficiary to challenge a will with a no-contest clause if they have probable cause to do so.
If there is evidence of undue influence, for example, then the beneficiary may have justification to challenge the will in spite of the no-contest clause. For instance, if you promised a beneficiary a certain asset but the beneficiary finds out somebody changed the estate plan without telling them, this may be probable cause for a challenge. All situations are unique, but no-contest clauses can help prevent challenges to your estate after you die.