By Lee Sherman
You’ve worked your whole life and amassed a good-sized fortune. You can’t take it with you but you do want to have the ultimate say in how that fortune is distributed among your heirs. That’s why you’ve got a will right? But, if your will is even slightly ambiguous, it’s likely that one of your relatives may decide to contest it. Challenges can range from an aggrieved relative who is unhappy about being left out of the will to one of your heirs who doesn’t like the amount they are receiving. Most such challenges aren’t successful, but in our increasingly litigious society, it’s all the more important to make sure you are protected.
The best defense is a good offense
The best protection against this is making sure that you had your wits about when you wrote the will, no-one held a gun to your head at the time, it is factual and complete and was prepared according to the laws in your state. But there are also some additional precautions that you can and should take.
Though not required by law in any state, notarizing your will provides a kind of legal “stamp of approval” that will make it harder (though not impossible) to challenge the will.
Adding a no-contest clause to the will won’t prevent someone from challenging it but it does ensure that the person challenging it will receive nothing if they lose the challenge. Considering that most challenges fail, this could be enough to disincentivize beneficiaries to mount a challenge just because they don’t like how much they are getting. However, this type of clause is unenforceable in some states (such as Florida) while subject in other states to exceptions that can render it useless.
No will is good will
One final and sure way to avoid a challenge to your will is not to have one at all. A trust can sometimes take its place and brings its own benefits. Your will is made public after you die and it is filed with the probate court, allowing anyone to see it and potentially mount a challenge. Whereas a revocable living trust is considered a personal document under the law and can and should be kept private.
Instead of, or in addition to a will, consider adding your beneficiaries directly to your savings and retirement accounts. With this approach, your assets are transferable upon your death and you avoid probate entirely. Avoiding probate means you avoid the often long and drawn out process of proving a will and distributing assets accordingly. No probate also means no challenges. The FDIC recognizes this arrangement as an informal Irrevocable trust. So long as the beneficiary is alive at the time of distribution, they will receive these payments with or without a will.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.
