Non-Contestability Clause

(redirected from No-contest clause)
Also found in: Legal, Wikipedia.

Non-Contestability Clause

1. A clause in an insurance contract giving the insurance company a certain, limited period of time during which it may contest a claim on the grounds of fraud or something similar. A non-contestability clause protects a policyholder from the risk of non-payment of a claim.

2. In a will, a clause forbidding beneficiaries from contesting the will. A non-contestability clause states that any contest of the will results in the contester's inheritance to other beneficiaries.
References in periodicals archive ?
An additional complexity is that the scope of prohibited conduct under a no-contest clause is often unclear, For example, a common no-contest clause forbids not just frontal challenges to the trust's validity under the doctrines of incapacity and undue influence, but also attempts to "'otherwise .
For example, a no-contest clause in a mill trust would likely pass muster under the public policy doctrine, but likely would not reflect the settlor's informed ex ante preferences.
ANTS, III, THE LIVING TRUST 116--17, 152 (2003) (calling a no-contest clause a "necessary provision[] for a good living trust" and an arbitration clause "an added protection").
To try to seem as sophisticated as lawyer-drafted documents, mill trusts can be up to one hundred pages long and include sweeping no-contest clauses and arbitration clauses.
Because no-contest clauses can thus chill a range of potential litigation, courts must differentiate between permissible terms and those that go too far.
Making the unconscionability doctrine the primary means of regulating no-contest clauses would interject procedural considerations into the analysis.
After all, through no-contest clauses, settlors can force beneficiaries to choose between bringing a claim and accepting a bequest.
No-contest clauses date back to the seventeenth century.
He was particularly critical of the part of their petition that asks the judge to void the no-contest clause.
Southwestern University law professor Herbert Krimmel said no-contest clauses were almost impossible to challenge until 1990, when the state Legislature changed the rules, making room for good-faith attempts to clarify probate matters.