When planning your Will, you may come across the term ‘No Contest’ clause, also known as a ‘Forfeiture Clause.’ But what does it mean, and why might it be worth considering?
Simply put, a ‘No Contest’ clause is a provision you can include in your Will to discourage beneficiaries from challenging its validity or disputing your wishes. If a beneficiary contests your Will and their challenge is unsuccessful, they could lose their inheritance or receive a reduced share. While this clause can help ensure your final wishes are respected, it’s important to consider its implications carefully.
Why add a ‘No Contest’ Clause?
The primary goal of a ‘No Contest’ clause is to reduce disputes among your beneficiaries. Here’s how it can help:
- Discourage legal challenges: Knowing that a challenge might jeopardize their inheritance could deter beneficiaries from disputing your Will.
- Promote harmony: By reducing the risk of conflict, this clause may help maintain family peace after your passing.
- Clarify your intent: It reinforces your wishes and provides clear guidance to your beneficiaries.
Things to keep in mind
Before including a ‘No Contest’ clause in your Will, consider these points:
- Unintended consequences: Including the clause might make a beneficiary aware they could have grounds for a claim, potentially sparking the very conflict you hoped to avoid.
- Clear communication is key: At Swinburne Maddison, we often recommend creating a Letter of Wishes (sometimes called an IPFDA Statement) alongside your Will. This document explains your reasons for specific gifts or the inclusion of a ‘No Contest’ clause, which could be particularly helpful in sensitive situations, such as addressing estranged family relationships.
A case example:
In the case of Simm v Pimlott, Dr. Sim included a ‘No Contest’ clause in his Will, leaving his wife, Valerie, £250,000, with the stipulation that she could not dispute this inheritance. At the time of his death, their marriage was strained, and divorce proceedings were underway.
Valerie contested the Will under the Inheritance (Provision for Family and Dependants) Act 1975, arguing it didn’t adequately provide for her. The court upheld the clause, agreeing that Dr. Sim’s Will was reasonable given the circumstances. However, the court also recognised that Valerie’s housing needs hadn’t been adequately addressed, leading to a variation in the Will requiring the purchase of a rent-free property for her.
Unfortunately, Valerie ended up forfeiting her cash inheritance due to the challenge and faced significant legal costs. This case highlights the risks beneficiaries face when contesting a Will and the importance of careful planning when drafting one.
If you’re considering including a ‘No Contest’ clause in your Will, or if you’d like more information about estate planning, feel free to contact Georgia Ismay on 0191 384 2441 or email gri@swinburnemaddison.co.uk. We’re here to help you make informed decisions about your legacy.
