No-Contest Clause Upheld by the Wyoming Supreme Court With No Probable Cause Exception

A no-contest clause essentially makes all gifts under the will or trust conditional upon not challenging the document, and the practice of including one is becoming increasingly popular in American society. Blended families may have a higher chance of disagreements and squabbles over inheritances, as beneficiaries may have varying levels of gifts.

Trust and estate litigation is frequently driven by emotion, and often times the beneficiary’s complaints are not rational, thus corresponding litigation can severely tap into the estate’s assets and funds. This is what the settlor is typically trying to avoid by the use of a co-contest clause. The Wyoming Supreme Court recently held in EGW and AW v. First Federal Savings Bank of Sheridan, 413 P.3d 106 (Wyo. 2018) that a no-contest does not violate public policy in Wyoming. 

The Court ruled that a “testator has the right to grant bequests subject to any lawful conditions he or she may select.” In the opinion, the Court explains that the ability to relinquish a person’s property in the way they so choose is a strongly held right, and one that is backed by the full power of the law. The Court also found that even with challenge is in good faith and with probable the no-contest clause is still enforceable. Many states allow challenges made with probable cause to be brought in spite of a no-contest clause, a principal that is set forth in § 3-905 of the Uniform Probate Code, but Wyoming did not adopt that section of the Code.

See Carol Warnick, No-Contest Clause Upheld by the Wyoming Supreme Court With No Probable Cause Exception, Fiduciary Law Blog, September 12, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.