On July 1, 2018, Indiana joined the 48 other states that allow the enforcement of so called in terrorem clauses in wills and trusts. These clauses, more commonly known as “no contest clauses” are provisions in a will or trust that state if a beneficiary seeks to contest the will or trust, they lose the property they were going to inherit. And now, pursuant to Indiana Code § 29-1-6-2 and Indiana Code § 30-4-2.1-3, these clauses, if included in a will or trust are enforceable by an Indiana court.
The common purpose of no contest provisions in a will or trust document is simply to reduce or eliminate the likelihood that beneficiaries will seek to initiate lengthy and expensive litigation to contest a will or trust. In this respect, a no contest provision can at least give beneficiaries something to think about before filing suit to contest a will or trust. It remains to be seen, however, whether or not the law has deterred these contests.
There are numerous exceptions contained in the statutes that limit the enforcement of no contest clauses in certain factual circumstances. Some notable exceptions include:
(1) An action brought by an executor or other fiduciary who is not a beneficiary;
(2) An action to determine whether a proposed motion or proceeding constitutes a contest;
(3) An action seeking to interpret the construction or interpretation of a will; and
(4) An action brought in “good faith” by the beneficiary.
Whether a no contest provision should be included in your will or trust may be dependent on many variables. If you are interested in having a will or trust prepared, contact the attorneys at Hodges and Davis, P.C. who can help you decide if a no contest provision is right for your will or trust.
Note that this post is only a brief summary of no contest clauses. It does not constitute legal advice nor does it establish an attorney/client relationship.
Hodges and Davis, P.C. – January 2020