When many people here the term “No Contest,” they think of what a defendant may have pled in a criminal proceeding in response to the charges he or she may be facing. However, with a coming change in Indiana Law, these two words are going to have a new impact on estate planning—Indiana’s new allowable No Contest Provision regarding an individual’s Will or Trust.
A “No Contest Provision” refers to a provision of the will (or trust) that, if given effect, would reduce or eliminate the interest of a beneficiary of the will (or trust) who, directly or indirectly, initiates or otherwise pursues: an action to contest the admissibility or validity of the will (or trust); an action to set aside a term of the will (or trust); or, any other act to frustrate or defeat the testator’s intent as expressed in the terms of the will (or trust).
This law takes effect on July 1, 2018. We can now incorporate this provision into your estate plan if you think it is necessary. Essentially, if you’re a beneficiary and are not happy you’re your inheritance (or lack thereof), then too bad! Of course, with any law, there are exceptions. So, a No Contest Provision isn’t “bulletproof,” though it does give you, us planners, and courts the ability to rid the court system of unmerited will or trust contests. I’m not going to dive into the exceptions to the new law at this time—since it’s new law, there will be court opinions that interpret how these exceptions truly play out.
All things considered, it’s my belief that this is a good step forward in Indiana’s law. Why? I often get asked the question, “Kyle, what happens if [name the beneficiary, or person disinherited here] isn’t happy about this or wants to contest it?” Well, now we have a new tool in the estate planning toolbox to increasingly help preserve your intentions—with less litigation after you’re gone.
If you’re married, and want to cut your spouse out—don’t even think about it! You’ll need a different lawyer for that. However, kids—be good!
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