When someone executes a will, their hope is that their assets will be distributed as they see fit. However, challenges to the will can frustrate that intent – so a testator may include a no-contest clause, in order to limit the chances of such a challenge. But do they work?
What is a no-contest clause?
A no-contest clause is a provision in a will that triggers certain consequences if a particular action is taken. They are often used by testators who wish to limit in-fighting among beneficiaries or challenges to the will by those beneficiaries. For instance, the clause may state that, if a beneficiary formally contests the will, that beneficiary will automatically inherit nothing from the will.
Nevada favors enforcement of no-contest clauses and has codified the policy in NRS 137.005. It states that courts must enforce no-contest clauses to the greatest extent possible so that the intent of the testator is carried out.
But there are limitations
The most obvious limitation of a no-contest clause is that it’s only effective against named beneficiaries. Someone who is not named in the will has nothing to lose and will not be dissuaded by the provision.
Furthermore, although Nevada favors the clauses, the courts will strictly construe the language used in the clause. Courts will only enforce those provisions that are clear and unambiguous on their face. If the clause is open to interpretation as to the testator’s intent, it will likely fail.
Because of this, it is crucial that a no-contest clause be drafted with the assistance of a professional who is experienced in Nevada estate planning, thereby limiting the chances of ambiguity creating problems in the future.