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158 Tr. & Est. 15 (2019)
Bulletproofing the Estate Plan

handle is hein.journals/tande158 and id is 589 raw text is: 58-year-old female. Those premiums would, in turn, give rise to an additional charitable deduction for the years they're paid. Achieving a Balance This is just one example of how advisors can help clients continue to make meaningful charitable gifts for public benefit after first fulfilling overriding obligations to fam- ily and others. In upcoming columns, I'll explore other situations in which careful planning can balance the desire to fund both intra-family and public philanthropy. Endnotes 1. wwwpewresearchorg/global/interactives/remittance-flows-by-country/ 2. See https://givingusa.org/giving-usa-209-americans-gave-427-71-billion- to-charity-in-2018-amid-complex-year-for-charitable-giving/ 3. See wwwmiccom/articles/188381/give-best-gifts-2018-ideas-guide-charity- spend-better-less-money. 4. wwwwashingtonpostcom/news/wonk/wp/2017/12/06/the-richest--per- cent-now-owns-more-of-the-countrys-wealth-than-at-any-time-in-the- past-50-years/ 5. https.://money.usnews.com/money/blogs/on-retirement/arti- cles/7-myths-about-millionaires wwwcenbccom/2019/05/l0/wealthx-bil- lionaire-census-majority-of-worlds-billionaires-self-madehtm. 6. www.usatodaycom/story/money/personalfinance/2016/01/01/winning-the- lottery-quick-riches/78083134/ TIPS FROM THE PROS Bulletproofing the Estate Plan By Charles A. Redd, a partner at Stinson LLP in St. Louis and a fellow of The American College of Trust and Estate Counsel A beneficiary may be motivated to contest a will or trust instrument because he believes he has sufficient grounds to invalidate the document (for example, due to forgery, lack of proper execution, fraud, incapacity, undue influ- ence, duress) and stands to gain economically if success- ful. A successful challenge to the validity of a document will cause the decedent's estate or trust to pass intestate or pursuant to an earlier document that wasn't contested (or wasn't contested successfully). In some instances, a beneficiary may challenge the validity of only a portion of a document. If the bene- ficiary is successful, only that provision is eliminated, and the remainder of the will or trust instrument con- tinues in effect. This approach, when allowed under applicable state law, can be beneficial if, for example, there are large pre-residuary bequests or gifts to indi- viduals and all or a portion of the remainder is to pass to the contestant. Under these circumstances, the contestant may have more to gain by attacking only the pre-residuary bequests or gifts. The pre-residuary bequests or gifts would be eliminated, the residue would become larger and the contestant would receive more than he otherwise would have received. No Contest Clauses Most no contest clauses-sometimes known as in ter- rorem or forfeiture clauses-are intended to discour- age a contest of a will or trust instrument by removing the beneficiary who challenges the validity of the appli- cable instrument. The foundation on which no contest clauses rest is the almost universally accepted principle of American jurisprudence that, with few exceptions, a property owner should be able to dispose of his property in whatever manner he sees fit. The laws of two states, Florida and Indiana, render no contest clauses void.' The laws of many juris- dictions strictly construe no contest clauses,2 others don't enforce no contest clauses in cases in which the contestant had probable cause for instituting a contest or instituted a contest in good faith3 and still others simply look to the language of the clause to determine whether the action at issue triggers operation of the clause.4 If a testator or settlor has completely removed a child or other individual whom the testator or settlor believes would challenge the will or trust instrument, a no contest clause won't serve its purpose. In such a case, that child or other individual has nothing to lose by bringing a challenge. Thus, the use of no contest clauses is effective only when theres a sizable enough bequest or gift to make the target beneficiary think twice about a challenge. A no contest clause may be designed to cause not only the contesting beneficiary to lose his inheritance 1S / TRUSTS & ESTATES / trustsandestates.com / SEPTEMBER 2019

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