Worried about leaving a gift to someone in your will? – Forfeiture or No-Contest clauses

Are you worried about leaving a gift to someone in your will? Whether it’s a family member, friend or someone else in your life, you might be worried about how that person will spend the money. Perhaps they have never been good with finances or your relationship with them has not always been easy.

One way to combat this is to include a ‘forfeiture clause’, also known as a ‘no-contest clause’. This works to deter the person receiving the gift (known as the beneficiary) from making a claim on your estate or from challenging the validity of your will, by stating that they will lose or forfeit their gift if they do so.

But beware! These forfeiture clauses are not guaranteed, in that, they do not stop the beneficiary from making a claim for financial provision from your estate or from challenging the validity of your will. If their claim is successful, they may end up walking away with a larger sum than you originally gifted them! On the other hand, if their claim is unsuccessful, they lose the gift!

For this reason, you should take steps to ensure your reasons for making the gift subject to a forfeiture clause are made clear and are documented. Whilst it may not be a good idea to include your reasons in the wording of the will itself (as the document becomes public after your death), you should leave a separate note with your will clearly setting out your reasons.

Depending on the relationship, it may also be wise to inform the beneficiary so that they are not met with surprise on your death. In the event the matter goes to court, it may well be that the courts will take into account the fact that the beneficiary was made aware of the situation beforehand.

Anyone can challenge the validity of your will, but only certain categories of people can make a claim for financial provision out of your estate; these are:

1. spouses or civil partners;

2. ex-spouses or ex-civil partners who have not remarried or entered into a new civil partnership;

3. those who have lived with you as though your spouse or civil partner for at least two years immediately before your death;

4. your children;

5. those who have been treated as a child of the family; and

6. those who have been financially maintained by you immediately before your death.

If you are worried about leaving someone a gift in your will, contact us for advice on how best to deal with the situation on 0203 219 0145 or lisa@oliverfisher.co.uk.