When a beneficiary named in a will believes that all or a part of a will is invalid, he or she generally has the right to file a will contest. The courts will then use their discretion to decide whether to hear the dispute or not. However, beneficiaries lose this right when the testator includes a “no-contest” clause. When beneficiaries discover that a no-contest clause exists, they want to know, are such provisions enforceable in Michigan?
According to WealthManagement.com, the purpose of no-contest clauses, also called forfeiture or terrorem clauses, is to prevent disgruntled beneficiaries from frivolously filing costly lawsuits after the death of the testator. In most cases, these clauses dictate that a beneficiary who contests all or part of a will or trust forfeits any inheritance he or she would have received. However, some testators take a less severe approach and simply design the clause to state that any person who files a dispute will receive only some inheritance. The provision may set to punish the petitioner by dictating he or she pays for any attorney fees and court costs associated with a contest through his or her share.
According to State Laws, No-Contest Clauses by the American College of Trust and Estate Counsel, Michigan is one of 22 states to have adopted the Uniform Probate Code rule that states that no-contest clauses are enforceable. However, per this rule, a person may bring a contest without punishment if the said contest is based on probable cause. In Michigan, as in 20 other states, no-contest laws also extend to trusts.