Posts tagged with "estate lawyer"

Is a No-Contest Clause Right for Your Will?

In order to discourage disappointed heirs from disputing your estate plan, you can include a “no-contest” provision that automatically cancels an heir’s inheritance if he or she challenges the distribution of your assets in any way. You are not obligated to leave property to anyone. The original reasoning for the no-contest provision was to intimidate any heir who may consider contesting a will or trust, thereby securing his or her cooperation.

“No-contest” clauses can be broad or narrow, and may even disinherit people who challenge transfers made outside your will (through a trust or beneficiary designation).

Of course, you cannot make a bequest of property you don’t own, but you can often provide in a will that a beneficiary will only receive your bequest if they abandon their rights in some other property. In a recent case, a court was asked to decide whether a refusal to abandon such rights would constitute a “will contest” that would void other gifts. When a testator died, he left a complex estate plan that included a will, a trust, and beneficiary designations for his retirement account. The testator’s wife legally owned part of his retirement account and other “community property.” The testator’s will and trust required his wife to abandon her “community property” rights in order to receive benefits worth $2.65 million from her husband’s trust.

The wife filed a special petition with the court, asking whether she would be viewed as “contesting” the estate plan if she sought to enforce her community property rights. The wife claimed that her husband had mistakenly transferred some community assets to his own trust, and she was merely trying to correct the mistake. On appeal, the Court ruled that the wife’s challenges would constitute a “contest.” Therefore, she had to decide whether to assert her “community property” rights (and thus receive only her share of community property, and nothing from her husband’s trust) or simply accept the provisions of the trust and will (thus sacrificing her “community property” rights).

This case illustrates an important issue. If you make a mistake in your estate plan, a “no-contest” clause in a will or trust may prevent your heirs from correcting the mistake. On the other hand, if you don’t include a “no-contest” clause, an heir might contest your estate plan, thus delaying the distribution of your assets, and frustrating your goals. There are many such issues with Estate Planning that require careful planning and expertise to avoid.

In most cases, a “no-contest” clause does make sense. However, as the example in this article illustrates, you want to be careful when doing your estate plan in order to avoid unnecessary problems for your heirs. Seeking competent advice is more often than not well worth the price paid

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Keep Your Estate Planning Documents Current

Too often we will responsibly execute legal documents, put them in a safe place and then promptly forget about them. An experienced estate planning attorney can assist with keeping your important legal documents current by making appropriate changes to these documents based upon your life or lifestyle.

There is no set schedule for updating your will, living will, durable power of attorney or living trust, etc. but there are some life events that may serve as a guideline. Some of those events could be getting married or a change in your marital status whether that is a divorce, the death of a spouse or a remarriage. Another may be becoming a parent.

Other life changing events impact our assets, perhaps making a major purchase like becoming a homeowner or selling a property, receipt of a substantial inheritance, moving to another state or even a change in the tax code would merit a review of our important documents. Changes in financial status, whether positive or negative, may warrant an update to your existing estate planning documents or in some instances, be better served by more complex legal documents.

Retirement is another milestone that can impact estate planning with regard to changes in financial needs and status. Sometimes life challenges like becoming disabled or other serious physical ailments may force us to re-evaluate our needs. Also, as we advance in years or experience negative changes to our health, we may wish to modify our estate planning documents.

It is important to periodically contact your attorney so that you can discuss life changes, review your important legal documents and effectively plan for the future. Like any successful partnership, you will want to trust and be comfortable with the lawyer with whom you choose to do business. Evaluate your research, use common sense and hire the attorney you feel will best represent and champion your needs.

It is important to update your documents frequently, and it is even more important to do that with experienced estate planning attorneys like those at Maya Murphy, P.C. If you would like to speak to one of our estate planning attorneys feel free to call 203-221-3100 or email at today!

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