If you are involved in probate or estate planning, you may have heard of "no contest" clauses. These provisions in a will or trust say that anyone who challenges the document's validity or the executor's actions will forfeit their inheritance. Sounds simple, right? Well, not quite. There are some common misconceptions about how these clauses work and their effectiveness. Here are some facts you need to know.

Myth #1: A "no contest" clause protects the executor from any liability

Some people think that the beneficiaries can't question how they choose to administer the estate if they are named as the executor of a will or trust with a "no contest" clause. This is not true. An executor has a fiduciary duty to act in the best interests of the estate and the beneficiaries. This fiduciary duty cannot be waived. Whether there is a "no contest" clause, the executor must follow the will or trust terms, keep accurate records, pay taxes and debts, distribute assets, and report to the court. If they fail to do any of these things, they can be held liable for breach of fiduciary duty.

For example, suppose an executor fails to account for the estate assets or delays the administration of the estate. In that case, the beneficiaries can sue them for damages and will not lose their share of the estate, even if there is a "no contest" clause. The "no contest" clause only prohibits the beneficiaries from challenging the substantive decisions made by the decedent.

Myth #2: A "no contest" clause prevents anyone from challenging the will or trust

Some people think that if they include a "no contest" clause in their will or trust, they can disinherit anyone they want, and there is nothing those people can do about it. This is not true either. A "no contest" clause only disincentivizes people from challenging the plan documents and only works if the beneficiaries have something to lose by doing so. People wholly disinherited have nothing to fear because they have nothing to lose.

For example, suppose someone leaves their entire estate to their caregiver, disinherits their children, and includes a "no contest" clause. In that case, the children may still challenge the will or trust for undue influence, fraud, lack of capacity, or other reasons. And they probably will do so since they would not get anything anyway, absent the challenge.

A "no contest" clause only works as a deterrent if the beneficiaries are entitled to receive enough from the estate that they are scared to lose if they challenge it. People often ask us how much they should give to a beneficiary to make the "no contest" clause effective. That depends on many factors, including the beneficiary's expectation about what they would receive, the beneficiary's financial position, the beneficiary's anger about their disfavored position, the beneficiary's feelings toward and relationship with the other beneficiaries of the estate, the size of the estate, and the reason for the disinheritance.

Myth #3: A "no contest" clause is always valid and enforceable

Some people think that if they include a "no contest" clause in their will or trust, the court will automatically uphold it and dismiss any challenges. This is not true either. A "no contest" clause is not a magic bullet that can shield a will or trust from scrutiny. Courts know that sometimes people use undue influence, fraud, coercion, or other improper means to get someone to create a will or trust that favors them. They are also aware that sometimes these same people use these same means to get them to include a "no contest" clause in the document.

So, courts do not necessarily take "no contest" clauses at face value and will still evaluate them through litigation. They will look at factors such as the reason for the challenge, the strength of the evidence, the relationship between the parties, the size of the estate, and the public policy implications. Courts may enforce or invalidate a "no contest" clause depending on these factors.

The bottom line is that probate and estate planning are complex and nuanced law areas requiring professional guidance and advice. If you are an executor or a beneficiary of a will or trust with a "no contest" clause, or if you are considering including one in your estate plan, you should consult an experienced attorney who can help you understand your rights and obligations and protect your interests.