Academic journal article Law and Contemporary Problems

Boilerplate No Contest Clauses

Academic journal article Law and Contemporary Problems

Boilerplate No Contest Clauses

Article excerpt

I

INTRODUCTION

"If any beneficiary under this Will in any manner, directly or indirectly, contests or attacks this Will or any of its provisions, any share of interest in my estate given to that contesting beneficiary under this Will is revoked. ..." (1) This is a "no contest clause": a provision that disinherits anyone who initiates litigation against the testator's estate plan. (2)

The law has long been ambivalent about no contest clauses. A single judicial opinion can waffle between treating these terms as "favored since they discourage litigation" and "disfavored because they work a forfeiture." (3) Scholars who believe that no contest clauses should be enforced cite the primacy of testamentary freedom, which seeks to facilitate rather than regulate the decedent's intent. (4) Others claim that no contest clauses must yield to "policies transcending private interests," like keeping the courthouse door open. (5) States have adopted a rain bow of different regulatory approaches, including enforcing no contest provisions, invalidating them, or ignoring them if a beneficiary had "probable cause" for her lawsuit. (6)

This invited contribution to Law and Contemporary Problems' special issue on The Butterfly Effect in Boilerplate Contract Interpretation examines no contest clauses from a different angle. (7) We ask whether these provisions are a symptom of a larger pathology in estate planning: a drafting norm in which attorneys rely too heavily on standardized terms without fully ascertaining the testator's informed preferences. Although people are drawn to any tool that can prevent conflict over their estates, it is well known that "[m]any attorneys include a no contest clause as boilerplate." (8) Moreover, no contest clauses can have drastic consequences, such as dismembering entire branches of a family tree from an estate plan. In fact, even when they do not apply, their mere presence can force beneficiaries to incur thousands of dollars in attorneys' fees to obtain declaratory relief that it is safe to take a particular action. (9)

We flagged this overarching problem in a previous paper, Boilerplate and Default Rules in Wills Law: An Empirical Analysis. (10) In that piece, we studied 230 wills from Sussex County, New Jersey, and discovered that they were riddled with stock terms that "sound[ed] authoritative, but ma[de] little sense in context." (11) Most of these clauses governed obscure subjects that testators were unlikely to understand, such as the exoneration of liens, the apportionment of taxes, and the division of property among multi-generational classes. (12) Alarmingly, this language often overrode majoritarian default rules which are designed to fill gaps in wills while remaining faithful to the wishes of most testators. (13) Thus, we urged courts and lawmakers to reinforce the background principles that govern these non-salient topics by making them sticky, or harder to draft around. (14)

This Article builds on this foundation by reviewing no contest clauses in 457 wills that were probated in Alameda County, California in the late 2000s. (15) We show that testators and their lawyers overuse no contest provisions. Indeed, these terms appear in nearly seventy percent of the wills in our sample, including many estates in which there is no realistic possibility of discord. For example, the clause in the first lines of this Article comes from the will of a deceased Alameda County resident named Louise Chin. (16) One can hardly fault Chin for taking precautions against litigation. Yet Chin also named her son Gordon sole beneficiary and executor. (17) Thus, the only person to whom the no contest provision applied was assuredly not going to challenge the instrument or the management of the estate. At the same time, the provision could have dissuaded Gordon from taking benign steps like asking the court to clarify an ambiguity in the will or to determine whether property belonged to the estate or was held in joint tenancy. …

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