what is the difference between disinheritance and a no-contest clause?

One of the most common things that springs to mind when we talk about wills and inheritance is disinheritance. Movies like Knives Out and Rainman play to our fascination with family drama. Seen as the ultimate - and final - insult, disinheritance is when a relative purposely leaves someone out of their will that would normally inherit.

But is disinheritance perhaps less final than we perceive it to be?

In reality, disinheriting someone in a will does not necessarily mean they won’t still inherit something from the estate. Especially if, as in Knives Out, the testator (the person who died and left an estate) made a radical change to their estate plan just before they died.

There are a myriad of reasons why people disinherit. I make no moral judgments; every family dynamic is unique. But some strategies are better than others to accomplish this goal. This post is meant to explain how disinheritance may be accomplished and the benefits and drawbacks of each method.

How does one disinherit?

Disinheritance is fairly straightforward. When one writes their will, they generally do two things: 1) they leave everything they have to other people, and 2) they make a specific statement in the will that they disinherit - or make no provision for - a person of their choosing.

What is a no-contest clause?

A no-contest clause (or in terrorem clause) leaves only a specified amount to the person they wish to disinherit and contains a provision that states if they contest the will and lose, they get nothing at all.

Which is better?

Famous attorney answer: it depends. It depends on the ultimate goal. It may be more important to the testator to assure the person they want to disinherit gets absolutely nothing.

Or, it may be that the testator anticipates a lot of fighting will happen in the family after they pass - like in Knives Out. In that case, no-contest clauses might help quell fighting. Why? Because anyone subject to this clause needs to consider their odds very carefully. If they contest the will and lose, not only will they inherit nothing at all, but they will then be saddled with the attorney fees it took to try to invalidate the will in probate. The amount one gives in a no-contest clause is very important as that could be the deciding factor to bringing suit or not.

Some Practical Tips

If one wishes to assure a relative will receive no part in their estate, there is one other way besides a disinheritance or no-contest clause in the will to accomplish that goal. If there are no assets to probate - meaning, all assets pass by contracts or trust and do not need to go through probate to be distributed - that can effectively cut that person out.

Even if one can assure their assets won’t go through probate, it may still be wise to indicate this wish through either disinheritance or a no-contest clause in the will. This is because assets change over time. People often forget to review beneficiary designations, especially for assets that they may only anticipate holding for a short time. It is possible for a trust to fail, or a gift may fail because the intended recipient died first. Having one of these clauses in one’s will assures their wish is still honored even if the intent was to never probate the estate.

Regardless as to which method one chooses, it is best to leave one’s reasons why out of the will. This is because a will is probated, that will becomes part of the public record. Even if the person doing the disinheritance doesn’t mind - indeed, that might be intentional - it could give the person disinherited enough cause to pursue a defamation suit. Getting this pound of flesh is not worth the aggravation and hassle.

The more important reason to avoid stating one’s reasons is because this only gives unhappy, disinherited people a reason to bring suit to challenge the will. They may try to argue that the will is invalid because the person who disinherited them couldn’t have been of sound mind when they made it. So it might be best to keep it simple. Identify the person by name so it is clear who is the subject of the disinheritance or no-contest clause, and save the reasons for a personal letter or a family meeting.

As difficult as it may be, one of the best ways to assure one’s wishes will be honored is to be open about it while alive. If the disinheritance comes as no surprise, there may be less chance of someone trying to challenge the will.

If that is absolutely not an option (and that would be completely understandable), another way to minimize fighting after one dies is to establish a pattern in one’s estate planning documents. That does not mean one has to execute a new will every year or every couple of years. One could execute what is called a codicil every few years. A codicil is like adding an amendment or explanation to one’s will. It must be executed with the same formalities as a will, but it is generally less expensive and time consuming because it leaves the existing will intact. So while it may appear strange that a person would disinherit say, one of their children, executing a codicil that states one’s continued intention to do so for the last say four or five years is a strong argument that it was in fact intentional.

No such thing as “ironclad”

Remember that as diligently as one may be in planning, there is no such thing as a completely airtight estate plan. For example , there are instances by law where a spouse and children are entitled to a portion of one’s estate for support. That is a topic for another day.

If there is significant family discord and a large estate is at stake, legal battles to invalidate a will may be unavoidable. The best one can do is try to anticipate what is likely to happen and address it ahead of time in the most sensible way possible.