A no-contest clause also called an in terrorem clause, is a topic I have discussed previously in my blog. Readers may remember that an in terrorem clause is a written sentence in a testamentary instrument (will or trust) that is designed to threaten someone, into refraining from an action or ceasing to act. The phrase is typically used to refer to a clause in a will or trust that threatens to disinherit a beneficiary if that beneficiary challenges the terms of the will or trust.
The Uniform Probate Code, §2-517 allows for no-contest clauses so long as the person challenging the will doesn’t have probable cause to do so. Some states, like Ohio, allow for “living probate” and “ante mortem” probate, which are statutory provisions that authorize testators to institute an adversary proceeding during their life to declare the validity of the will, in order to avoid later will contests.
Florida does not follow the Uniform Probate Code and does not recognize the enforceability of in terrorem clauses in wills or in trusts. The Florida Probate Code, at section 732.517 provides that “A provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable.”
Similarly, the Florida Trust Code provides:
§736.1108. Penalty clause for contest
(1) A provision in a trust instrument purporting to penalize any interested person for contesting the trust instrument or instituting other proceedings relating to a trust estate or trust assets is unenforceable.
(2) This section applies to trusts created on or after October 1, 1993. For purposes of this subsection, a revocable trust shall be treated as created when the right of revocation terminates.
What Constitutes a “Contest”?
For those states that recognize no contest provisions, and for those trusts in Florida that were created prior to October 1, 1993, there often arises a dispute concerning whether the actions of a beneficiary constitute a “contest.” Reasonable minds differ on the definition of “contest”, however, generally, it is agreed that a will or trust contest occurs when a party claims that the document purported to be the testator’s last will or trust is invalid on grounds that include the lack of testamentary capacity, fraud, undue influence, improper execution, forgery, or subsequent revocation of the will or trust by a later document.
Courts in Florida and other states have been frequently called upon to interpret no-contest clauses. Here is a review of some cases that have handled the issue of what constitutes a “contest” for purposes of the application of a no-contest clause in a will or trust. Although the cases are dated, they provide probate litigators an idea of how to predict how a court might treat a fact pattern similar to those presented in the precedent-setting cases:
In re Estate of Rauf 213 So.2d, 31 (Fla. 1st DCA 1968) involved beneficiaries, the husband and son of the testatrix, who filed notices in the probate proceedings to avoid charitable bequests pursuant to statute. The Court concluded that there was a clear violation of the will’s forfeiture provision which canceled the bequest to each if he directly or indirectly took steps to have the will declared invalid, or to have the charitable devises or bequests declared void. Importantly, in this case, the Court specifically noted and observed that the testatrix had expressly pointed out reasons for not leaving her estate to her “inattentive” son or estranged husband, and provided that any forfeited gift should be divided between two charities, or an institution of higher learning if the charitable bequest were voided, the court stated that it was made very clear by the testatrix in her will that she did not want her husband or son to inherit more of her estate than the small cash bequests specified.
Railey v. Skaggs 212 So.2d 86 (Fla. 3d DCA 1968) involved a beneficiary who filed a petition for the construction of a will requesting the removal of the trustees of a testamentary trust for the wrongful abuse of their fiduciary powers. The Court refused to apply or enforce a non-contest clause which directed the forfeiture of the interest of any beneficiary who, among other acts, instituted “any proceeding to prevent any provision from being carried out in accordance with its term, whether or not instituted in good faith and with probable cause.”
Kolb v. Levy 110 So.2d 25 (Fla. 3d DCA, 1959) the court decided that a legatee who filed four claims against an estate, but never prosecuted a lawsuit to force payment from the estate to pay the claims, did not amount to a “contest” within the meaning of its exclusionary provision so as to disinherit her under the will’s no-contest clause.
Porter v. Baynard, 158 Fla. 294, 28 So.2d 890 (1946) cert den. 330 U.S. 810, 91 L.Ed. 1266, 67 S.Ct. 1085 it was held that the filing of an answer by the beneficiaries of a will, who were made parties defendant to a suit brought by the executor and trustee for instructions as to their legal duties, in which the beneficiaries asserted that a clause creating a trust was void under the rule against perpetuities, did not establish a “contest” of the will such as would affect a forfeiture of their interests under the will.
Wells v. Menn 158 Fla. 228, 28 So.2d 881 (Fla. 1946), the Florida Supreme Court held that where a legatee resorts to the courts for the purpose of settling doubtful rights under the will or to determine how far his interest might be affected by it, and not for the purpose of destroying the will or any of its provisions he will not be penalized by the loss of his legacy under a will containing a provision for forfeiture in case of a contest.