by Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
“If you fight, after I die, you get nothing!” The Idaho Supreme Court agrees.[1]
For the first time the Idaho Supreme Court had addressed head-on the enforceability of a “no-contest” clause in a Trust.
Roger and Sybil Ferguson created a Trust, and after they both died, there were disputes among the Trustee and the Ferguson children as to how to handle the Trust. This matter ended up before the Idaho Supreme Court. Part of the Court’s decision covered the “no contest” provision in the Trust.
“We hold that no-contest provisions in trust instruments are enforceable in Idaho…unless probable cause existed for instituting the proceedings.”
They went on to say “Probable cause exists if there is evidence leading a reasonable person to conclude that there was a substantial likelihood that the challenge would succeed.”
Estate planning attorneys have included “no contest” clauses in trusts for years and used them successfully. A sample clause is below.
The Trustee is hereby authorized to defend, at the expense of the Trust Estate, any contest or other attack on this Trust or any of its provisions. In the event that any Beneficiary under this Trust shall, singly or in conjunction with any other person or persons, contest in any Court the validity of this Trust or seeks otherwise to void, nullify, or set aside this Trust or any of its provisions, the right of that person to take any interest given to him or her by this Trust shall be determined as it would have been determined had the person died prior to the execution of this Agreement without surviving issue.
Why include such a clause in estate planning documents? It stops disgruntled Beneficiaries from fighting when there is nothing to fight about. It saves time and added attorney fees that otherwise would be required when dealing with a Beneficiary that is unhappy, troublesome, or who can’t be pleased even though the Trustee is administering the Trust as required under the Trust document.
Trustees welcome the clear endorsement of the “no contest” clause by the Idaho Supreme Court.
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[1] Ferguson v. Ferguson, 473 P.3d 363 (Idaho 2020)
