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21st February, 2022
A “no contest” clause is a device that can be included in a Will to try to put someone who is unhappy with the terms of a Will off the idea of challenging its validity or bringing a claim under the Inheritance (Provision for Family and Dependants) Act 1975. Nathan v Leonard and National Association For Mental Health (2002) is cited as the leading case on no-contest clauses in Wills. It turns on particular facts, however.
The deceased’s Will directed that the Leonards be permitted to occupy a property in which she and they owned a half share each for as long as they wished. Her residuary estate was then divided into three parts with two thirds going to the Leonards.
The final third of the residuary Estate was held on a discretionary trust for the Andrew Nathan and two named charities.
A later home-made codicil set out a “no contest” clause as follows:
"As a safeguard to my wishes and to protect them from any parties be they family members or the charities, should they wish to contest or disagree with my will. Then, I want the following clause to over ride everything previously stated in my will. The following will become my will in its entirety. This I hope will prevent anyone from taking this case of action.
I GIVE DEVISE AND BEQUEATH My beneficial share in the Property known as Oakwood farm, to my beneficiaries to SALLY LEONARD and PAUL LEONARD. Free of any taxes, which will be covered by my estate.
I also give to the above named persons all my real and personal property. This clause cannot be superseded, and will only come into being if at anytime during the life of the Trust or up to 80 years has elapsed."
Andrew Nathan brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975 arguing that insufficient financial provision had been made from him under the terms of the Will.
The Leonards argued that this claim triggered the operation of the no-contest clause in the Will.
At trial Judge Martin QC held that a no-contest or forfeiture clause was not void for repugnancy or because it was contrary to public policy even though the argument that the clause was triggered effectively disinherited the charities as well as the claimant. A no contest clause might be repugnant if it was inconsistent with ownership, which this was not.
The mere fact that a clause might deter a claim from being made did not make it contrary to public policy.
A no contest clause could not seek to bar a potential claimant from bringing a claim under the Inheritance (Provision for Family and Dependants) Act 1975 as to do so would be to attempt to oust the Court’s jurisdiction and that would be against public policy.
A clause that provided that a beneficiary will forfeit their interest under a Will if they make a claim, including a claim under the Inheritance (Provision for Family and Dependants) Act 1975 is not contrary to public policy. The Court’s jurisdiction is not ousted by such a clause but the clause itself will be a disincentive to bringing a claim. A beneficiary doing so runs the risk that they will forfeit their interest under the Will and secure less by way of entitlement following a successful 1975 Act claim.
In Nathan v Leonard the further disincentive of the claim disinheriting the other residuary beneficiaries was also held to be valid. Ultimately in Nathan v Leonard the Codicil (which included the no contest clause) was found to be void for uncertainty as there appeared to be words missing from the last paragraph.
The answer is to decide carefully if a no contest clause is called for and, if one is, to ensure it is drafted properly.
The general principle is that a no-contest clause will only be valid if it provides for a gift over i.e. that the benefit shall pass to someone else on forfeiture. If there is no gift over, the primary gift will be subject to an impermissible in terrorem condition imposed in order to induce the beneficiary not to contest the Will on pain of receiving nothing.
Where there is a gift over this is considered sufficient evidence that the testator’s intention was not merely to threaten the recipient by imposing the condition, but, rather, to make a different disposition in favour of another beneficiary in the event that the condition is not satisfied.
Generally the no-contest clause will be deemed to take effect whether a challenge succeeds or fails unless the clause itself states otherwise in circumstances where a 1975 Act claim is made. A Court may take account of the provision which has been forfeited when considering what reasonable financial provision will be. If the making of a claim has forfeited any entitlement under the terms of a Will the Court will be looking at whether a nil provision is reasonable.
Jennifer Laskey, a Director at Howes Percival who specialises in helping clients to bring or defend challenges to Wills comments:
“These clauses can give someone pause for thought. As a solicitor advising clients who come across Wills which include these clauses it is important to look at the full circumstances and consider what serves the client best – sometimes a no contest clause can safely be ignored but it is essential to weigh up the options first”.
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