Mary Jane is well aware that her two daughters do not get along. Janey, the elder daughter, is certain that her younger sister, Jamie, is Mary’s favorite. Jamie is convinced her mother is partial to Janey. In writing her will, Mary Jane is dividing her estate three-quarters to Jamie and one-quarter to Janey, having taken into account their differing financial circumstances. Janey, who is a physician herself and married to a surgeon, has no money worries. Jamie is a social worker employed by MHMR and her husband is a struggling artist. Should Mary Jane include a no-contest clause in her will?
A no-contest clause, often referred to formally as an in terrorem clause, is, when included in a will, a provision designed to prevent beneficiaries from contesting the will. Typically, the no-contest clause will state that a beneficiary who contests the will forfeits any benefit the beneficiary would otherwise take under the will. The purpose of the no-contest clause is to cut down on litigation over the validity of the will.
Most contests to a will are based upon a claim that the testator was either not mentally competent to write a will or was unduly influenced in the writing of the will. At the time Mary Jane executed her will, she was an active college professor holding a doctorate and without any mental health issues; therefore, she had no worry about a competency challenge. Her concern was that Janey might attempt to invalidate the will by contending that Jamie had unduly influenced their mother to prefer her in the will.
Generally speaking, a no-contest clause is enforceable in Texas unless the person bringing the action did so in good faith and had just cause. This had been true for many years in Texas based upon decisions in prior cases decided in Texas, that is, under the common law. In 2009, the Texas legislature codified that common law into a statute as Texas Estates Code §254.005.
If Janey were to contest Mary Jane’s will, the no-contest clause would go into effect, depriving her of the one-quarter of the estate left to her under Mary Jane’s will unless she showed she had brought her contest in good faith and had just cause to do so.
If Mary Jane and her lawyer have taken the proper precautions, her lawyer would be able to testify that: (1) Mary Jane had been alone when she consulted with him about her will; (2) Mary Jane had discussed with him at length her decision to disproportionately benefit her daughters; (3) he had questioned her about her motivation and had ruled out any undue influence by Jamie; and (4) Mary Jane had revealed that she and Jamie had never discussed her will and that Jamie would be surprised that her mother had not divided her estate equally between her two daughters. With these facts, it would make it difficult for Janey to show she had just cause to contest the will.
Some lawyers include no-contest clauses in their drafts of wills as a matter of course, making them a part of the boiler plate provisions included. Other lawyers are more judicious, believing the clause has the potential to create unnecessary ill-will toward the testator or among the beneficiaries. These lawyers only include a no-contest clause if facts raise concerns that litigation will ensue. In Mary Jane’s circumstances, it seems clear that a no-contest clause is appropriate and advisable.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.