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Counterattack Tips for Thwarting a Will Contest

From contentious relatives to scam artists, wills are not immune to the threat of a contest. If you have an inkling such a fight could be in your estate's future, here are some ways to limit the risk. (opens in new tab) (opens in new tab) (opens in new tab) Newsletter sign up Newsletter (Image credit: Getty Images) By Linda Kotis, Esq. last updated 10 November 2022 The news is full of stories about the famous who didn't bother to make a will to dispose of their substantial fortunes. And though many others did make a plan, various issues with their testamentary documents have led to costly and protracted litigation. Some examples:Beatle John Lennon's will (opens in new tab) failed to mention his first son, Julian Lennon.Actor Gary Coleman (opens in new tab) had a 1999 will probated, with a 2005 will and a 2007 holographic codicil later surfacing that left all to his third wife, from whom he was divorced when he died.Hotel magnate Conrad Hilton's (opens in new tab) will left $100,000 to his daughter with Zsa Zsa Gabor and the bulk of the rest of his millions to charity. The daughter filed suit and lost.Railroad heiress Huguette Clark (opens in new tab) left two wills, 42 days apart, for her $400 million estate, with the second will disinheriting family members named in the first.Singer James Brown (opens in new tab) left much of his estate to charity, with little passing to his wife and children. Sophisticated planning by the wealthy elite doesn't preclude disappointed family members and hangers-on from trying to upend the plan. Adding an in terrorem provision (no-contest clause) to a will or revocable trust is a traditional strategy to discourage attacks. It can cause the forfeiture of an inheritance, for example, when a person objects to being excluded from a will or trust, the appointment of the personal representative or trustee, or claims to be a creditor after a probate court denies such status.

What to Consider When Deciding Between a Revocable and Irrevocable Trust Since, however, no-contest clauses are unenforceable in Florida and Indiana, and courts in other states may refuse to enforce them under certain fact scenarios, other preemptive action should be considered. Here are a few strategies:

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Profit and prosper with the best of Kiplinger's expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of Kiplinger's expert advice - straight to your e-mail. Sign up 1. Authorize personal representative or trustee to pay costs of a potential contest. Some states' probate and trust codes - like Florida (opens in new tab), for instance - expressly authorize personal representatives and trustees to litigate on behalf of an estate or trust or hire attorneys for that purpose. In other jurisdictions where the code is silent, a will or a revocable trust may be drafted with such provisions. Even when a potential heir is omitted from a will or trust, knowledge that assets of the estate or trust could be used for litigation expenses and thus potentially diminish the value of assets available for recovery in a lawsuit may deter a contest. 2. Require mediation for disputes. Some states, such as Virginia (opens in new tab), allow the use of mediation, arbitration, or alternative dispute resolution procedures to resolve issues of trust interpretation or administration. A will or trust could require a potential contestant to use an alternative to litigation, and provide guidelines for dispute mediation, such as the process for selecting mediators, whether it is an adjudicatory or collaborative process, and the scope, timing and nature of mediation. 3. Use a litigation holdback fund. Rather than forfeiting his/her entire interest by filing a lawsuit, the beneficiary's interest could be escrowed, with access restricted during a contest. The interest when eventually paid to the beneficiary would then be reduced by the expenses of litigation (opens in new tab). Similar to the first bulleted item, a potential reduction in the assets available after the lawsuit provides a disincentive to initiate the suit in the first place. 4. Create a separate trust for a contentious beneficiary. Trust codes give a beneficiary the right to request a complete copy (opens in new tab) of the trust agreement created for such person's benefit. By creating two revocable trusts naming different beneficiaries, those named in Trust One would not see the contents of Trust Two, and vice versa. This could prevent a disgruntled family member from comparing (opens in new tab) his/her trust interest to that of another trust for other relatives. Note that this approach may be unsuccessful if the beneficiaries allege a fraudulent transfer to create the separate trusts. 5. Address common grounds for contests in advance. An anticipated contest based on common attacks on capacity or a document's validity may be derailed as follows:Not of sound mind. For disputes about lack of testamentary capacity, have the testator/settlor undergo an examination by two physicians for capacity issues. Provide the physicians' signed statements as schedules to the will or revocable trust.Forgery or manipulation. To counter claims of falsifying a document or manipulation into signing a document without a clear understanding of its provisions, include a statement of testator/settlor intent in the will or trust about the estate plan.Invalid execution. For charges of undue influence, or lack of valid execution, execute the will or trust during filming of a video. Explain the dispositive scheme and inclusion of beneficiaries. Obtain a signed statement from each witness and the notary. Have a third-party certify the video's authenticity.Later will or trust. For allegations that a will or trust was previously revoked, include statements in a video about the documents being the most recent versions and that they have not been revoked. 6. Create a condition precedent to receiving the interest. State that a beneficiary would receive a share of the estate if such person does not initiate a contest for a certain time-period, such as two years after death. This alternative uses the risk of forfeiting one's interest in the near-term to deter litigation. It also may give the potential contestant time to reconsider his/her disappointment over the inheritance. A disadvantage is that a court may find it constitutes a prohibited in terrorem provision or is otherwise unenforceable based on the factual situation. The strategies previously mentioned are alternatives to using an in terrorem provision. Of course, one's will or trust could always include a no-contest provision anyway. Note that having such a clause did not prevent a Florida will from being admitted to probate. Plus, the presence of such a provision may discourage beneficiaries from pursuing litigation, even when the likelihood of enforcement seems weak.

Need to Hire a Lawyer? Why Local is Best. Individuals concerned about protecting their estate plans should consult a qualified attorney to review potential vulnerabilities to attacks. Working with a practitioner in advance may thwart a potential contest or at least help to mitigate the damage, if one does occur. This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab). Explore More Building Wealth Linda Kotis, Esq.Of Counsel at Ivins, Phillips & Barker, CharteredLinda is Of Counsel at Ivins, Phillips & Barker (opens in new tab). She advises clients on forming and revising their estate plans and analyzes estate, income, generation-skipping transfer, and gift taxation matters for high-net-worth individuals and families. Linda's significant experience also includes analysis of complex state trust administration and non-tax issues, charitable gift planning and real property transfers. Prior to joining IPB, Linda practiced law for seven years at an AmLaw 100 firm. During her tenure in the Estates, Trusts, and Tax Planning Group, she gained significant experience with the administration of large and complex estates, formation of private foundations, and high net worth guardianships. She is the author of articles on trusts, estates, and tax topics and has spoken at the ABA, DC Bar, and breakfast briefings on fiduciary administration issues. Latest What Is Lifetime Income Insurance Worth? A Guaranteed Lifetime Withdrawal Benefit (GLWB) could be just what you need when markets are down and you're worried about future income. By David Blanchett, PhD, CFA, CFP® • Published 12 November 22 Stock Market Today: Stocks Keep Climbing on Interest-Rate Optimism Investors continued to cheer Thursday's inflation update, with the Nasdaq and S&P 500 scoring their best week in months. By Karee Venema • Published 11 November 22 You might also like What Is Lifetime Income Insurance Worth? A Guaranteed Lifetime Withdrawal Benefit (GLWB) could be just what you need when markets are down and you're worried about future income. By David Blanchett, PhD, CFA, CFP® • Published 12 November 22 4 Ways You Can Take Advantage of a Down Market With markets down for the year, it may seem that all the news is bad. But now could be a good time to make some profitable moves. By Adam Grealish • Published 11 November 22 Finding Peace of Mind With Your Retirement Income Even in tough times, you can secure retirement income that lets you maintain your lifestyle, lasts a lifetime, adjusts for life events and leaves a legacy for the kids. By Jerry Golden, Investment Adviser Representative • Published 10 November 22 What to Do When an Unhappy Customer Threatens to Ruin Your Rep Some customers go too far when they feel they haven't been treated well, demanding unreasonable make-goods and even resorting to extortion. An attorney offers some advice. By H. Dennis Beaver, Esq. • Published 10 November 22 Rising Interest Rates Change the Math on Pensions for Some Would-Be Retirees Now is a good time to think about when and if to take a lump sum on your pension and what to do with it. Let's explore the pros and cons. By Michael Aloi, CFP® • Published 9 November 22 5 Steps to a Stronger Financial Plan It's impossible to be right all the time, but a strong plan and constantly assessing where you are can help you pivot when bad things inevitably happen. By Eric Roberge, Certified Financial Planner (CFP) and Investment Adviser • Published 8 November 22 Safe Harbor 401(k)s Can Help Small-Business Owners Keep Happy Employees Immediate vesting and contributions by the employer regardless of the employee's participation pump up workers. Employers get lower costs and tax benefits. By Mike Piershale, ChFC • Published 8 November 22 5 Survival Tips for the Bear Market It's been a painful year for investors, but focusing on the long term and implementing constructive actions can help weather the turbulence. By Daniel Kern, CFA®, CFP® • Last updated 8 November 22 View More ▸ kiplinger About Us (opens in new tab) Terms and Conditions (opens in new tab) Privacy Policy (opens in new tab) Cookie Policy (opens in new tab) Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site.
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