Are you entitled to leave your assets to whomever you please once you die?  Not quite. 

There are a few pieces of legislation that restrict you from doing so, by requiring:

• you to discharge a moral duty to provide for your children; 
• that your spouse receives their fair share; and
• you to fulfil promises you made to compensate others for services performed during your lifetime.

Provisions made in a Will can often be set aside for a number of reasons, resulting in distributions in ways that are contrary to the Will-makers’ intentions.

It is possible to include ‘no contest’ provisions in Wills that attempt to return some autonomy to Will-makers to make it more likely that their assets will go to the people or organisations they intend.

‘No Contest’ Provisions

A ‘no contest’ provision can seek to disinherit beneficiaries of a Will if they challenge provisions of that Will.

People often include these provisions to try to ensure that their Will takes effect as intended, and to dissuade beneficiaries from actions in Court that lead to whittling down of estate assets.

However ‘no content’ provisions are not foolproof.

Many legal duties can override a ‘no-contest’ provision, for example the moral duty owed to children under the Family Protection Act 1955. A no-contest provision can be helpful if the Will-maker wanted to leave their estate to their children in unequal shares.

Validity of Conditions

No-contest provisions in Wills are regarded as conditions, because the gifts in the Will are conditional on the beneficiaries not contesting the Will.

Examples of why a condition in a Will might fail include circumstances where a condition is unlawful, contrary to public policy, uncertain, contrary to the other provisions of the Will, etc.

Further, an example of a condition being contrary to the interest given to the beneficiary of the relevant gift would be if the Will-maker left the family home to their brother “in fee simple” (meaning the brother has full ownership and control of the property) on the condition that the home is not sold.

Reinforcing ‘No Contest’ Provisions

The general principle of no-contest provisions is that for such a condition to be valid there must be a gift-over provision setting out what happens to the gift if a beneficiary does challenge the Will (i.e. whether that gift is included in the residue of the estate or otherwise).

By including a gift-over, the no-contest provision will no longer be considered a mere idle threat to induce the beneficiary to comply with the condition.

The no-contest and gift-over provisions should be as clear as possible, as uncertainty is another ground on which a condition may fail.  For example, it is not contrary to public policy for a Will-maker to impose a condition requiring the beneficiary to be of a particular religious faith.

Effect of Invalidity

When a condition is void, what happens to the gift depends upon whether:

• that gift is of real estate or personal property, and
• the condition is a condition precedent or subsequent.

Conditions in a Will are either a:

• condition precedent, meaning no gift is intended at all unless and until the condition is fulfilled; or
• condition subsequent, meaning failure to comply with the condition is intended to put an end to the gift.

No-contest provisions are therefore conditions subsequent. Failing to comply by contesting the Will is intended to put an end to the gift(s) to that beneficiary.

Where the gift is of real estate, and the condition is a condition precedent, the gift fails to take effect along with the condition.

Where the gift is of personal property and a precedent condition is impossible to fulfil, the gift usually will not fail. However, the gift may fail if the performance of the condition was the sole motive of the gift, or its impossibility was unknown to the Will-maker initially.

Summary

No-contest provisions may be a powerful tool at your disposal to ensure that your estate is actually distributed in the manner set out in your Will.  Caution should be taken, however, as your particular circumstances, how your no-contest provision is drafted, and how the rest of your Will is drafted, could lead to your no-contest provision being set aside.

For greatest peace of mind about your assets going where you actually want them to once you die, it is always prudent to take legal advice before preparing a Will.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.