When you pass away, you won’t have much control over what can happen to your assets in Massachusetts or how some of your heirs will be treated by other beneficiaries who seemingly have better means. To avoid changing the terms of your will or trusts or even exploitation of some people mentioned in your estate planning documents, you can use a no-contest clause. Here’s what you need to know about it.
What is a no-contest clause in a will and trust?
An in terrorem clause (another name for a no-contest clause) is a provision that some people in Massachusetts use in their estate planning documents to prevent a beneficiary from challenging their wishes after their death. In terrorem is a Latin word for “in fear,” which basically puts a swift end to any legal challenges against a trust or will and results in harsh punishments against the contester. For example, their actions can prevent them from receiving their allotted inheritance.
Is using a no-contest clause a good move?
If your beneficiary knows that they may forfeit their inheritance by challenging your estate documents, they are less likely to do it. This can help save time and money during asset distribution. Furthermore, it will significantly reduce the chances of beneficiaries disputes after your death.
On the other hand, if your heir takes action against your will or trust and wins, they may be entitled to receive more money than they would have under the estate’s original documents terms. This could create a financial burden for the estate. Additionally, will contests are necessary when there are suspicions of fraud or issues with some of your assets. An in terrorem clause can prevent that from happening even when unscrupulous people take advantage of your beneficiaries.
You can choose to use a no-contest clause or not by weighing the pros and cons and also by looking at the uniqueness of your family circumstances. Regardless, being open about your estate plans to your family can significantly reduce future contests or conflicts.