No-contest clauses are designed to prevent estate disputes. While the wording may vary from one will or trust to another, they all essentially set up the same “carrot-and-stick” approach by telling beneficiaries that they cannot challenge the will without losing everything they stand to gain.
No-contest clauses are not enforceable in every state, but they are enforceable in Indiana – but there are some important exceptions to the rule.
What are the exceptions?
Under Indiana law, the court is rather broadly empowered to decide that a beneficiary will not be subject to a no-contest clause if they have “good cause” to bring their suit. That may happen in cases where there is a reasonable suspicion of fraud or undue influence, for example.
A no-contest clause will also not be triggered when:
- The lawsuit is brought by an executor or trustee who is not a beneficiary of the estate
- There is an agreement among all the beneficiaries and interested person to settle the issue
- The suit is brought expressly to get a court’s ruling on whether a proposed action is actually a contest, or simply to clarify the interpretation of the will or trust
- The suit is brought to get clarity on proposed distributions, fees paid to the executor or trustee or about any other issue over which the court has discretionary power
A no-contest clause in a will does not actually guarantee that an estate will be immune from challenges – especially when beneficiaries have a valid reason to raise legal questions. If you are contemplating challenging a will, it’s important to explore your options as quickly as possible, before your window of opportunity closes.