A “no-contest” clause is a common provision included in wills and trusts that is meant to dissuade a beneficiary from contesting the testator’s intent. A standard no contest clause generally states that a beneficiary who challenges a will or trust will receive nothing, or have their share drastically reduced to a nominal amount, such as one dollar.
The key to an effective no-contest clause is to offer enough incentive. In other words, a would-be-challenger must receive enough under the will or trust instrument to have something meaningful to lose. If the incentivizing bequest is too small, the clause will be of little help. For example, an heir who receives a small bequest in the context of very large estate will likely be more inclined to risk losing it for a chance to have a much larger share. In an estate of many millions, involving heirs of considerable means, no-contest bequests may need to be quite large – perhaps millions of dollars – to effectively counter an unwanted challenge, especially where emotions may be running high.
Often beneficiaries will review a will or a trust with a no-contest clause and conclude that they must accept the terms, or risk losing their inheritance. In turn, testators and grantors generally assume that no-contest clauses in their estate planning documents will always be enforced. However, a “no-contest” clause does not always mean that no contest is possible.
Washington Usually Respects No-Contest Clause
In general, Washington courts respect no-contest clauses. For instance, in In re Estate of Rathbone, 190 Wn.2d 332 (2018), the Washington Supreme Court upheld the validity of a no-contest clause as well as a nonintervention clause in a will, where the testator had included a broadly worded no-contest provision and also specifically named the beneficiary who was likely to challenge. Although the trial court and appellate court held that courts were allowed to interpret the provisions of the will and thereby permitted the anticipated challenge to proceed, the Washington Supreme Court reversed the lower court decisions, stating that courts should show restraint when the testator’s intent is so clearly stated.
It is important to note, however, that the Washington Supreme Court said its holding in Rathbone was supported by the particular facts of the case, where a son was specifically named in the will as a potential challenger. Therefore, the decision is probably better viewed as strongly encouraging judicial restraint from interpretation, not a blanket statement that all no-contest clauses are per se enforceable in Washington. In fact, the case law reveals that such clauses are not enforced in all circumstances.
When There Are Exceptions
Washington courts have held that a “no contest clause is inoperable if the challenger brings his or her contest in good faith and with probable cause.” In re Estate of Primiani, 2017 Wash.App. LEXIS 1019, *16 (Div. 3) (unpublished decision); see also, In re Estate of Chappell, 127 Wash. 638, 646, 221 P. 336 (1923); In re Estate of Kubick, 9 Wn. App. 413, 513 P.2d 76 (1973); and In re Estate of Mumby, 97 Wn.App. 385 (1999). In practice, this means generally that a challenge will be respected and not result in disinheritance, when the plaintiff has proceeded under the guidance of an attorney, provided they have fairly and fully disclosed all of the material facts and the contest.
In addition, a no-contest clause may be drafted in such a way to afford some flexibility, allowing enforcement in certain circumstances – for instance, if there has been a breach of fiduciary duty. A challenge may be permitted also if it is brought forward on public policy grounds.
Careful Consideration and Review is Critical
Regardless of the side you’re on, careful consideration should be given to the specific language of no-contest provision, the nature and size of bequest that is at risk, and the character and inclinations of the persons involved.
Finally, it is important to note that the enforcement of no-contest clauses is jurisdictional, with some jurisdictions, such as Oregon, enforcing no-contest clauses more strictly and others like Washington being less strict.
To learn more about your situation, please contact Eric Stoll, David Petteys, or Jeannie Osgood at (206) 456-6697, or via email at email@example.com.
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