When you die, the way that you distribute your assets among the people you care about and the causes you support will be what ultimately constitutes your legacy. The relationships you’ve had and the lives you’ve touched will typically fade over time, but financial legacies can last for generations with proper planning.
Unfortunately, if you have a family that doesn’t support the same charities as you, share your values or agree with your decision to unequally distribute your assets, it’s possible that your relatives or loved ones might eventually challenge your estate plan in hopes of their own financial benefit. Can you include a clause in your last will that disinherits someone who challenges your will for personal gain?
Indiana finally allows no-contest clauses
Language included in a last will or estate plan with the intention of preventing beneficiaries and family members from challenging the estate are known as no-contest or in terrorem clauses. For decades, Indiana was one of only two states that did not allow for the use of no-contest clauses in any circumstances.
The remaining 48 states permitted no-contest clauses and upheld them to varying degrees. However, Indiana has since joined the majority of states that uphold no-contest clauses. The legislature passed a bill in 2018 that has since become law. It specifically permits testators creating last wills to include no-contest clauses as a way to deter their loved ones from bringing unnecessary challenges against their estates.
If your family knows about the clause, your estate may be even safer
Including a no-contest clause in your last will is a good way to prevent your family members from diminishing your legacy by challenging your contributions to charity or an uneven distribution of assets among your children. Avoiding provoking people with unexpected changes to your estate plan can also reduce the risk of a challenge.
Generally speaking, transparency is usually the best choice for those planning their estate. Let your family members know roughly how you intend to assign your assets when you die and also make sure that they all understand that you have included a no-contest clause that will disinherit them if they challenge your wishes.