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No Contest Clauses in Wills & Trusts, Safe Harbor

A no contest provision in a will or trust is a clause which states that if a beneficiary/heir engages in certain activity he/she is automatically disinherited from the will or trust. More often than not, the activity triggering disinheritance is the filing of a lawsuit challenging the validity of a will or trust (be it from lack of capacity, undue influence, etc.). No contest provisions are also called forfeiture provisions or  in terrorem clauses. They are often applied to other types of lawsuits and many wills/trusts purport to disinherit an individual if they institute other types of litigation related to a will or trust (e.g., personal representative removal, breach of trust, trustee removal). Their usual purpose is to discourage estate litigation and facilitate the expeditious administration of an estate.

Though they may result in a harsh outcome, no contest clauses are enforceable in Missouri. See Tobias v. Korman, 141 S.W.3d 468, 477 (Mo. Ct. App. 2004). Specifically, a no-contest or forfeiture provision is to be enforced where it is clear that the settlor of the trust or testator of the will intended that the conduct in question should result in the forfeiture of a beneficiary’s/heir’s interest under the trust or will. Id.Chaney v. Cooper, 954 S.W.2d 510, 519 (Mo. Ct. App. 1997). Because the language of a no contest clause is not always immediately clear, there is often trepidation with beneficiaries exploring litigation in the face of possible forfeiture. In fact, there have been instances in which beneficiaries have been disinherited for conduct they did not believe would trigger a forfeiture.

Recognizing this dilemma — but still respecting the ability of a settlor/testator to structure his or her will/trust — Missouri recently adopted a “safe harbor” law which allows a beneficiary to obtain a court’s determination as to whether certain conduct will trigger forfeiture. Under Section 456.4-420, RSMo, if a trust that has become irrevocable contains a no-contest clause, an “interested person” may file a petition seeking a court order determining whether certain conduct would trigger application of the no-contest clause and/or whether the clause is enforceable. Furthermore, the statute  outlines several actions which cannot as a matter of public policy trigger a forfeiture.

Estate litigation is complex. It often involves large sums of money and many different parties with different objectives. The existence of a no contest clause can certainly compound this complexity and requires competent counsel to adequately navigate potential pitfalls. Contact with questions.