The Evolving Landscape of No-Contest Clauses in Trust Instruments

Trusts and Estates practitioners regularly wade into the turbulent waters surrounding the triggering of no-contest clauses found in last wills and testaments. In general, these clauses seek to discourage beneficiaries from challenging a will by disinheriting or severely limiting the inheritance of a beneficiary should such beneficiary decide to mount a challenge to the validity of the testamentary instrument. To be clear, New York law disfavors no-contest clauses and strictly construes their application, but courts will enforce the specific language so as not to contravene the intent of the testator. This differs from some states, such as Florida, where no-contest clauses are void as against public policy in both wills and trusts.

There are, however, certain statutory limitations to implementation of a no-contest clause in a will. Specifically, Estates, Powers and Trusts Law (EPTL) 3-3.5(b) sets forth actions taken by a person interested in the will, which would not trigger a no-contest clause. These “safe harbor” provisions are as follows:

(b) A condition, designed to prevent a disposition from taking effect in case the will is contested by the beneficiary, is operative despite the presence or absence of probable cause for such contest, subject to the following:

(1) Such a condition is not breached by a contest to establish that the will is a forgery or that it was revoked by a later will, provided that such contest is based on probable cause.

(2) An infant or incompetent may affirmatively oppose the probate of a will without forfeiting any benefit thereunder.

(3) The following conduct, singly or in the aggregate, shall not result in the forfeiture of any benefit under the will:

(A) The assertion of an objection to the jurisdiction of the court in which the will was offered for probate.

(B) The disclosure to any of the parties or to the court of any information relating to any document offered for probate as a last will, or relevant to the probate proceeding.

(C) A refusal or failure to join in a petition for the probate of a document as a last will, or to execute a consent to, or waiver of notice of a probate proceeding.

(D) The preliminary examination, under SCPA 1404, of a proponent’s witnesses, the person who prepared the will, the nominated executors and the proponents in a probate proceeding and, upon application to the court based upon special circumstances, any person whose examination the court determines may provide information with respect to the validity of the will that is of substantial importance or relevance to a decision to file objections to the will.

(E) The institution of, or the joining or acquiescence in a proceeding for the construction of a will or any provision thereof.