Plan To Be 100

An unpublished Court of Appeals opinion out of Kent County offers some interesting issues regarding the scope of no contest clauses.

Decedent had three children, one of whom was developmentally disabled.  Decedent was that child’s plenary guardian.  Daughter A was the standby plenary guardian.

Decedent left a will that said that Daughter A would receive a 1/3 interest in the residue of the estate, but that her share would be forfeited if she acted as guardian for disabled sibling.

After Decedent’s death, Daughter A took steps to obtain her appointment as guardian over her disabled sibling, obtaining the appointment based on her position as standby guardian.

Personal Representative petitioned the Court to affirm the enforcement of the terror clause, and prevailed on summary disposition, which decision was upheld by the Court of Appeals in Estate of Rudy Jauw, September 13, 2012.

It is notable that in this case the terror clause was used to cause a beneficiary to lose her share of the estate for something other than challenging the validity of the instrument.  Rather, the penalty was imposed for behavior unrelated to the validity of the document itself.  Planners may want to consider other applications for this type of expanded terror clause.