Note: This article discusses only selected topics involving how to safeguard the intentions in your will. It is not comprehensive coverage of wills and is not intended to give legal advice. Always consult your trusted legal advisors for wills and other estate planning.
Although a will generally allows you to decide where your money and other assets will go after you die, this does not mean your every wish can or will be granted. For one thing, according to the Colorado Probate Code, you cannot completely disinherit your spouse. He or she is guaranteed a share of your estate. There is also the possibility that your will could be contested—perhaps by someone feeling insufficiently rewarded by its terms. If contested successfully, this could derail some of your final wishes as well.
In a regular “Money and the Law” column in the Colorado Springs Gazette, attorney Jim Flynn of the firm Flynn & Wright offers useful details on these matters, along with a little-known maneuver that may help protect your will against challenges.
Let’s look first at the spousal factor. Flynn writes: “A spouse’s right to elect against the terms of a will and take a statutory share instead starts at a 5% share during the first year of marriage and increases to a 50% share after 10 years of marriage. (No extra credit after that.)” So that’s a cut-and-dried stipulation. You cannot use your will to leave your spouse with nothing.
How about when a will is contested? As Flynn notes, this is probably more likely to occur when you’ve omitted someone from your will who is expecting an inheritance, or leaving such a person less than what was expected. Such a disappointed party may contest your will in the hope of winning a better share of your assets.
“A good example would be a will that leaves 40% of an estate to one child but only 10% to another child,” Flynn writes. “If, following the death of the will-making parent, the child getting the 10% share successfully challenges the validity of the will and the will ceases to be effective, the laws of intestacy say both children will be treated equally.”
Diminishing the risk of challenges to your will in Colorado
Are there ways to minimize the risk of a challenge to your will? Flynn says yes. As he notes, the common grounds for contesting a will are alleging the incapacity of the will-maker and/or undue influence on that person. So it is far better to prepare your will “at a time when there is no question about your mental capacity and there is no one around coaching you on what your will should say.”
Then Flynn goes on to describe another strategy couched in probate law called an “in terrorem” clause, which he says is more colloquially referred to as a “no-contest” clause. “What these clauses say is this: if a person challenges the will and loses, that person forfeits whatever he or she would have received under the will.”
As he explains, for a person who is unhappy about his or her treatment in the will, “an in terrorem clause turns a will contest into a high-stakes gamble. If the challenge is successful, the contesting party gets more; if the challenge is unsuccessful, the contesting party loses the inheritance provided for in the will.”
But the law being the law, it is still not quite that simple. Flynn confirms that in Colorado, in terrorem clauses are enforceable. “But there is an important string attached. If there is ‘probable cause’ to challenge the will, an in terrorem clause will not be effective even if the challenge is unsuccessful.
However, to establish probable cause, an unsuccessful contestant must prove there was a substantial likelihood the contest would be successful.”
An ironic but practical consideration to protect your wishes
Got all that? Flynn does go on to offer this reassurance: “Scholarly legal analysis (to say nothing of common sense) suggests that proving a substantial likelihood of success in a case you just lost will be difficult, which adds support for the proposition that in terrorem clauses can in fact achieve their intended purpose of reducing the risk of a will contest.”
And then there is this bit of advice that may sound ironic but could prove beneficial on a practical level for anyone thinking about completely omitting an inheritor in a will. Flynn observes that an in terrorem clause has no deterrent effect on someone entirely left out of a will because that person has nothing to lose by mounting a challenge to a will (except legal expense, which might be a deterrent on its own).
Thus, to be effective, Flynn says in a will with an in terrorem clause you could consider leaving the person you think might contest your will an amount that would be painful to walk away from in the event of an unsuccessful challenge. In other words, make such a person have something to lose in the “high-stakes gamble” of contesting your will.