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Do you need a no-contest clause for your high-value estate plan?

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Do you need a no-contest clause for your high-value estate plan?

| Oct 13, 2020 | estate planning |

The greater the value of your assets, the more reason your loved ones will have to fight over your estate. Especially if you have spent a lifetime saving wealth in order to create a specific legacy, you probably don’t want the people closest to you to destroy your plans by challenging your wishes. 

Being forthright with your family about your intentions is usually a good way to reduce frustration or anger about your wishes after you die. However, you may also want to consider including a no-contest clause in your Texas estate plan.

How does a no-contest clause work?

Perhaps you’ve set aside more than half of your estate for a charity or non-profit organization, such as a scholarship fund. Maybe you chose to leave one child less than the other because of differences in their needs or your personal conflicts with them.

A no-contest clause in a will prevents people are unhappy from bringing frivolous legal challenges in the hopes of securing more of the estate. These clauses work by attaching a penalty, often disinheritance, to challenges against the estate. It works by raising the stakes, should they choose to fight.

Does Texas enforce no-contest clauses? 

Texas does allow testators to disinherit or otherwise penalize the beneficiaries of their estate if those individuals bring unnecessary and frivolous challenges to their last will. 

However, it’s worth noting that if the person bringing the claim can demonstrate probable cause for their action or good faith, meaning that they suspect malfeasance on the part of another party rather than merely feeling unhappy with the terms you set, the courts may choose not to penalize them for their challenge. 

In most other cases, however, you can expect that a no-contest clause will help protect your legacy from unnecessary challenges. Discussing adding such a clause to your last will can be a smart move for someone anticipating friction during their estate’s administration.