Non-Contestability Clause – Definition

Cite this article as:"Non-Contestability Clause – Definition," in The Business Professor, updated September 24, 2019, last accessed June 4, 2020, https://thebusinessprofessor.com/lesson/non-contestability-clause-definition/.

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Non-Contestability Clause Definition

A non-contestability clause is a clause that prevents heirs or beneficiaries of a will to contest or dispute the terms of the will. According to this clause, if an heir contests a will, his inheritance can be redistributed. A non-contestability creates room for the removal of an heir from a will of such heir disputes or contests the terms of the will.

A Little More on What is a Non-Contestability Clause

A will is a legal document written by an individual (the testator) stating the distribution of their property after their demise. This document contains the names of the beneficiaries, the property allocated to them and details of the properties. In most cases, heirs to a will do not agree to the distribution of properties, they contest the will and maintain a prolonged fight over distribution of properties.

A non-contestability clause is a provision that testators include in their wills to punish heirs that contest the will after their death.

Despite the benefits of this provision, its effectiveness is strained given the fact that heirs can contest a will in court regardless of whether the will contains the clause or otherwise.

Not all states enforce the non-contestability clause. In some cases, the court decides whether an heir has a claim or not despite the presence on a non-contestability clause. Also, some states have specific situations where the non-contestability clause is enforced.

Instead of using a non-contestability clause in the settlement of an estate, using a trust has proven to be more effective. A trust is seen as a more effective way of ensuring that an estate gets distributed rather than a non-contestability clause that can be rendered ineffective by the court or state laws.

Contestability Periods in Life Insurance

When used in the life insurance context, contestability is exercised by insurance companies to dispute the validity of a claim, thereby refusing to make payment for the claim. Contestability is often used by insurance companies when there is a false information noticed in the claim or other inaccuracies.

In an insurance application, if the party making claims refuse to supply all the information needed by the insurance company, contestability option can be used which leads to the refusal of a company to pay a claim. In a life insurance policy, contestability period only lasts for two years or less before the policy becomes effective.

References for “Non-Contestability Clause

https://www.investopedia.com/terms/n/noncontestabilityclause.asp

https://definitions.uslegal.com/n/non-contestability-clause/

https://legal-dictionary.thefreedictionary.com/Non-contestability+clause

https://familyoffices.com/non-contestability-clause/

blacks_law.enacademic.com/17934/non-contestability_clause

 

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