For most families, one of the goals of estate planning is to minimize future turmoil that may occur after they pass away by addressing how their assets and estate will be settled upon their death. It is often very helpful to have mom and dad make those hard decisions now and not leave a mess for kids to cleanup. Even if you do not have children, you should still be working with your attorney to create an estate plan. Throughout the years we’ve seen several files where an unmarried individual passed away with no kids and long-lost relatives popped up to seek what they believed was “their share”, that great aunt Betty had promised them.
How do you avoid the possible challenges and future conflict? The best way to address the issue is to sit down now with your attorney, accountant, and financial advisor to put together an estate plan that includes at a minimum a Will, power of attorney form and health care directive. Get these documents in your estate planning tool box. Working with a professional to set up these documents can help minimize future challenges. Your attorney not only knows the key language to include in your documents but can also assess your ability to create those documents and prevent future challenges.
Occasionally, I have clients that request that a “no contest” clause be included in their legal documents. This is a clause that would say if you challenge what my Will says, you will forfeit your inheritance and you get $1.00. It certainly sounds like a good idea to help prevent those unhappy heirs from challenging your Will. On the flip side, it seems to unfairly penalize those people that have a legitimate reason to challenge your Will. For example, your son is concerned that the Will you made a week before you died with a “no contest” clause, disinheriting your family and leaving everything to an unknown religious group in a foreign country was a sham. Should he be disinherited for questioning the legitimacy of this late Will?
Minnesota has adopted the uniform probate code that puts a limit on how far these clauses can go. The statute provides that a “provision in a Will purporting to penalize an interested person for contesting the Will or instituting other proceedings relating to the estate is unenforceable if probable cause exists for instituting proceedings.” In other words, if there is a valid reason for challenging your Will, you cannot disinherit the person who brought the challenge or leave them $1.00. It may help prevent frivolous litigation claims but it will not prevent possible future litigation if there is probable cause for bringing the lawsuit. Knowing how this clause will be viewed, we rarely include “no contest” clauses on our legal documents. Your best defense is a little offense, get your estate planning tool box set up with a professional.
Please send me an email at email@example.com with any topic suggestions or requests you may have. Although we cannot give you legal advice through the column, we can provide some general information that may be helpful for you to know. Our purpose is to educate and we hope that you can take something new away from this column each time you read it.