Non-Contestability Clause

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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 ?
Leavitt, supra note 6, at 46 ("Since forfeitures are disfavored by the courts, the no-contest clause is strictly construed to prevent this result whenever possible.
at 2211 ("[I]f a testator leaves potential contestants nothing under a will, a no-contest clause becomes toothless because would-be contestants have nothing to lose by bringing the contest.
The Mississippi Supreme Court recently held that the probable cause standard applies even though the no-contest clause itself states that forfeiture will occur regardless of whether the beneficiary acts in good faith and with probable cause.
Nevertheless, even the law governing this most basic species of no-contest clause is a patchwork of inconsistent approaches and decisions.
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.
Now dissidents like the plaintiffs in the Hearst case can go to a judge and ask for a ``safe harbor'' ruling that says their challenge will not violate the no-contest clause.
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.
No-contest clauses will prevent most frivolous attempts to overturn a trust, but there is one key exception: The Uniform Probate Code ensures that a no-contest clause is unenforceable if probable cause exists for contesting the will.
That allows a beneficiary to launch a contest without triggering the trust's no-contest clause -- and risking the loss of his or her inheritance.
A no-contest clause might be a good idea if the client expects heirs to be disappointed or outraged by how much of the estate they're receiving.