Online resource center to help you explore these key issues, and others, regarding your estate.

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Mr. Miller has many years of experience in designing and implementing a comprehensive variety of Trusts, Wills, and other estate planning documents, as well as settling estates in the most expedient and appropriate method. Further, he counsels and assists clients on becoming eligible for VA benefits and Medi-Cal.

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Mr. Miller has been active in the area of VA Pension and Medi-Cal for well over a decade. He uses various specialized types of Trusts as well as non-trust strategies to gain eligibility for his clients and save the family money.

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Mr. Miller has been settling estates (both simple and complex) for well over 40 years. The starting point is always to create a strategy to settle the estate in the most efficient manner possible with a minimum of taxes. Often times the strategy created allows the family to bypass Probate Court proceedings.

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Pleading No Contest!

By merv,

  Filed under: Blog, Estate Planning

I have devoted a fairly significant amount of space on this blog talking about the importance of avoiding disputes related to your estate plan.  From the articles here and here, you should be clued in by now that lawsuits over inheritances are no fun.  Johann Kaspar Lavater once said, “Never say you know a man until you have divided an inheritance with him.”

Perhaps the most common method of avoiding an inheritance lawsuit is called a No Contest Clause. Essentially, the point of such a clause is that, if a beneficiary contests the will, trust, or trust amendment, that person’s inheritance will be reduced to zero if they lose the suit.  Of course, such a clause is most effective in the case of uneven distributions because the contesting beneficiary has something to lose.  Note that when someone is disinherited, their inheritance cannot be “reduced” to zero.  Thus, including a No Contest Clause to protect against a person who has been disinherited from contesting has no purpose.

No contest clauses are so common at this point, they are practically boilerplate.  If you look at your trust, it is probably written in the portion of the document you may not have paid much attention to, but where much of the legal meat is.

If you chose to include the clause because you are concerned about one of your beneficiaries challenging your documents, here are a couple of hints. First, look through all your documents.  If it contains a distribution or other important section, make sure it also includes a no contest clause or omission of heirs clause.  The clause in your original document will not generally apply to documents created later, such as codicils or amendments.  Therefore, if you decide to cut back someone’s inheritance, add a non-relative beneficiary, or even change your trustee, it is worthwhile to make sure that a new no contest clause is included.

Secondly, if you have disinherited a legal heir or left unequal distributions, it may be worthwhile to write a letter about the reasons for your decision.  Perhaps you helped a child with a down payment on a house and thought it was fair to treat it as an advance of inheritance. Explaining in writing why you felt this was a fair approach may ensure that the child doesn’t later feel slighted. Perhaps one of your children has had debt problems and you are concerned that creditors will take the distribution.  You spoke with your attorney and decided that for whatever reason, creditor protection strategies would not be worthwhile in your case.  Explaining that you weighed the options and perhaps even recommended that another beneficiary use a portion of his inheritance to help support the indebted child may avoid some hurt feelings.

The best part is, you don’t even need an attorney to help you with the letter!  It is not a binding legal document, but it will provide an answer to otherwise unanswerable questions.  A letter may also go a long way toward helping to prove your competency in the event it is later challenged.  If you decide to write a letter, I generally recommend starting it off with the phrase “I know this letter has no legal effect but….” (just to make sure there is no question on its effect) and keeping it in a safe place with your other documents.  That way, you can destroy it if you later change your mind.  You may also want to provide your attorney with a copy at your next trust review.

Although the force of no contest clauses is not terribly strong on its own, coupling it with the above strategies will show that you intend for the clause to be there and you have real reasons for it.  It is simply another way to plan while you can!

Estate Planning: The Price of Organization, Rewards, Gifts, and Wondrous Tax Things…
FREE REPORT:  This complimentary report, focused on Estate Planning, is comprised of many of Mr. Miller’s articles from his long running column for the largest regional newspaper in San Diego County. This report will guide you through the questions surrounding getting your estate planning in order.

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About Living Trusts

About Living Trusts is hosted by the Law Offices of Merwyn J. Miller, as your online resource center to help you explore these key issues, and others, regarding your estate.

Merwyn J. Miller, J.D.

  • Board Certified Specialist in Estate Planning, Trust & Probate Law
  • Co-Author of legal text book and of “Don’t Go Broke in a Nursing Home
  • Teacher of law courses at public and private colleges
  • Continuing Education Instructor for attorneys
  • Columnist for largest regional newspaper in San Diego County and professional journals for 15 years, Contributing author to the book “In Your Service: The Veteran’s Friend”
  • Masters Degree in Financial Services - Estate Planning

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