Nervous Beneficiary Seeks Assurance from Court on No Contest Clause

Wise bequest managers are skittish about no-contest clauses, which disinherit any beneficiary who makes a fuss during estate administration.  Courts enforce these clauses frequently enough to warrant caution.

The worried beneficiary in Application of Follman, 197 N.Y.S.3d 682 (Surr.Ct. Queens 2023) was troubled by some monetary transactions that had occurred during estate administration but was hesitant to request clarification because the trust contained a no-contest provision. So, he asked the court to make an advance ruling whether such a request would violate the clause. The trustee fought back with surprising vigor.  He sought a ruling that the request for advice itself had triggered the provision and mandated the disinheritance of poor Follman!

The court’s ruling left both Follman and the trustee unsatisfied. It said that Follman was still eligible to receive an inheritance, because the “mere consideration” of legal action is not legal action. However, it also declined to provide Follman with the advice he sought, noting ominously that although no-contest clauses are “not favored,” they “are enforceable.”

CCK COMMENT: Courts rarely issue “advisory” opinions, so Follman’s application was destined for failure. Enforceability of no-contest clauses depends on the applicable state law, the facts of a particular case and the mindset of the presiding judge. Rolling the dice is always dicey (!). If a significant bequest is involved, caution is the order of the day and careful legal research is essential. (Note: For those that undertake research, no-contest clauses are also known as in terrorem provisions. The Latin phrase means “into fear” or “about fear.”  Testators intend to scare beneficiaries into silence.)

This article was originally published on LinkedIn on February 12, 2024. You can check out our LinkedIn here to stay updated on all things Bequest Management.