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Time for Legislative Action on No-Contest Clauses in Wills or Trusts

The law of Virginia Dodged a Bullet in 2015 and just Dodged Another Last Week!

I fully realize in the Time of COVID, reform of non-contest clauses in wills and trusts seems trivial. But the Virginia courts have suddenly been dealt with a number of cases discussing these clauses that forbid legal contests over what is left in wills and trusts upon threat of loss of the inheritance.

On first glance, this seems like a good idea. Even favorable to stop frivolous lawsuits caused by angry and disappointed heirs.

However, there is a countervailing interest threatened: The right to go to court for a redress of grievances. And the effect of these clauses could be to equip certain parties (trophy wives and step-mothers come readily to mind) with tremendous power to in effect force the beneficiaries to take very unfavorable terms or risk loss of the estate.

Recently, in Rafalko v. Georgiadis, the Supreme Court can close to saying that a contest started before discovery of the clause by the beneficiaries could be fatal to the inheritance.

What the Virginia Supreme Court did hold is that in terrorem (the fancy legal name for no-contest clauses) are part of Virginia law and will be enforced strictly accordingly to its terms.

However no one raised the constitutional issue of whether depriving a person of a right to go to court invalidates these clauses – actually not invalid but just unenforceable in court.

In the latest case, Hunter v. Hunter, the trust had a draconian provision that the trustee did not even have to do the otherwise-legally requirement to inform and report on the trust proceeds to the beneficiary. The trial court actually held the no-contest clause barred this inquiry into legal rights.

The supreme court reversed but did not overrule the former in terrorem rule. Again, no one raised constitutional issues.

The Hunter case forced this issue for this writer. And he has some experience in this area: This blogger has actually written an article on this issue and here is his conclusion (paraphrased):

There are cases in several states that have established a “probable cause” standard for unsuccessful contests that would not affect the right to inherit. Some have cited state constitutional provisions such as right to go to court (Virginia does not have that provision but the Commonwealth does have general due process.) Other states have passed a statute (it is recommended in the Uniform Probate Code [written by lawyers and judges at the National Conference of Commissioners of Uniform State Laws]) based on this clause (Section 3-905):

SECTION 3-905. PENALTY CLAUSE FOR CONTEST. A provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable if probable cause exists for instituting proceedings

Now I am not crazy about the use of a term more well-known in criminal law/procedure being used here in wills and trusts. But the alternative is to allow one sided laws that prevent potentially meritorious claims.

It is time for the General Assembly to pass this section and put an end to one-sided disputes between trustees or executors and beneficiaries and uphold the right to to court with a colorable claim.

About Elwood Sanders

Elwood "Sandy" Sanders is a Hanover attorney who is an Appellate Procedure Consultant for Lantagne Legal Printing and has written ten scholarly legal articles. Sandy was also Virginia's first Appellate Defender and also helped bring curling in VA! (None of these titles imply any endorsement of Sanders’ views)

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Tom White Says:

Nothing is more conservative than a republican wanting to get their majority back. And nothing is more liberal than a republican WITH a majority.

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