"No Contest" Means "No Contest"
From Mark J. Welch's Legal Advisory newsletter, Summer 1994
Such "no contest" clauses can be broad or narrow, and may even disinherit people who challenge transfers made outside your will (through a trust or beneficiary designation).
Of course, you cannot make a bequest of property you don't own, but you can often provide in a will that a beneficiary will only receive your bequest if they abandon their rights in some other property. In a recent case, Burch v. George, a court was asked to decide whether a refusal to abandon such rights would constitute a "will contest" that would void other gifts.
When Frank Burch died, he left a complex estate plan that included a will, a trust, and beneficiary designations for his retirement account. Under state law, Frank's wife Marlene legally owned part of his retirement account and other "community property." Frank's will and trust required Marlene to abandon her "community property" rights in order to receive benefits worth $2.65 million from Frank's trust.
Marlene filed a special petition with the court, asking whether she would be viewed as "contesting" the estate plan if she sought to enforce her community property rights. Marlene claimed that Frank had mistakenly transferred some community assets to the trust.
On appeal, the California Supreme Court ruled that Marlene's challenges would constitute a "contest." Therefore, she had to decide whether to assert her "community property" rights (and thus receive only her share of community property, and nothing from Frank's trust) or simply accept the provisions of the trust and will (thus sacrificing her "community property" rights).
This case illustrates an important problem. If you make a mistake in your estate plan, a "no-contest" clause in a will or trust may prevent your heirs from correcting the mistake. On the other hand, if you don't include a "no-contest" clause, an heir might contest your estate plan, thus frustrating your goals.
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