Estate plans can range from highly complex to incredibly simple. People can use a half dozen different documents or simply draft a will. Each testator creating an estate plan has their own needs and priorities. They choose what documents to draft and what terms to include in them based on their goals, family relationships and need for protection.
For example, particularly as people approach their retirement years, they may begin to worry about their children fighting amongst themselves after they die or one family member trying to contest their legacy and diminishing what everyone inherits from their estate.
Some people address this concern by adding a no-contest clause to their wills. What do people in Minnesota need to know about no-contest clauses?
The courts may enforce a no-contest clause
Some people refer to a no-contest clause as a penalty clause or an in terrorem clause. Essentially, someone adds language to their estate plan to reduce or fully eliminate the inheritance of an individual who contests or challenges their estate plan.
There are different rules about such clauses in every state, so knowing how Minnesota handles such matters can benefit many people. Testators planning their estates need to know what tools they can use. Personal representatives administering an estate may need to know when they are likely to face legal complications, and beneficiaries concerned about the terms of an estate plan may feel strongly that they need to take the matter to court because of questions that they have.
In Minnesota, the probate courts can uphold a no-contest or penalty clause. If the courts believe that someone brought a frivolous filing against someone’s testamentary documents, the judge hearing the case can enforce a no-contest clause and strip that person of their inheritance rights.
However, Minnesota state law has a very specific exception to that rule that people need to know. The courts typically cannot enforce a no-contest clause if the plaintiff initiating the challenge can convincingly show that they had probable cause to suspect undue influence, fraud, a lack of capacity or other complicating factors that might invalidate the will.
In some cases, a will contest could lead to someone losing their inheritance rights. Other times, it might prompt the courts to set aside an outdated or invalid will in favor of older documents. The courts could also apply intestate succession laws if there is no prior will to guide the probate process. For these reasons and more, understanding how Minnesota approaches no-contest clauses can benefit those with an interest in an estate.