What Can We Learn From A Snowbird “Doc”? Insights into Estate Planning and No-Contest Clauses

What Can We Learn From A Snowbird “Doc”?

A Wyoming resident (and part-time Floridian), chiropractor Donald “Doc” Taylor passed away in August of 2021 at the age of 81. Leaving behind his estranged son, Chadwick, Doc took the trouble of drafting a comprehensive estate plan with his attorney, including a trust with a non-contest clause. Doc’s estate is worth around $12M, with only $100K going to his son and the rest going to Doc’s neighbors, friends, and health care providers.

The Legal Battle Unfolds

As can be expected, his son challenged the estate plan and claimed that his neighbors and friends used undue influence to get themselves named as Doc’s beneficiaries. The Judge, in a 7-day trial, heard them all out, including the attorney, and ruled that not only do the friends and neighbors win, but now the son isn’t entitled to anything, given the no-contest clause (wamp-wamp-wamp).

Insights into No-Contest Clauses

So, what can we learn from Doc and his son? We can discuss no-contest clauses in the Sunshine State. Should Doc have made Florida his domicile and drafted his estate plan here, would the no-contest clause hold up in Court?

A No Contest Clause (or terrorem clause) is a section in a will or trust that penalizes an interested person who seeks to contest or challenge the validity of the will or trust instrument. Typically, the no-contest clause punishes a beneficiary for contesting the will or trust by stating that the person loses their entire right to receive any gift or devise under the will or trust if he or she contests its validity or challenges the terms of the will or trust.

Florida’s Stance on No-Contest Clauses

Florida laws invalidate no-contest clauses in both wills and trusts. There is no penalizing our beneficiaries here in Florida. The Courts upheld the statute multiple times as it’s not fair to make a beneficiary choose between the right to contest a will or trust and the right to take under it. The no-contest clause doesn’t invalidate the will. The will and/or trust would still be valid, but the no-contest clause is not enforceable.

Implications of Doc’s Domicile

If Doc was a Floridian, his son may not have won the estate plan challenge, but he would still be entitled to his bequest in the trust.

Conclusion

So, there you have it, we learn that an estate planning attorney (that knows what they’re doing) can enforce an estate plan should it be challenged and that Florida laws prohibit no-contest or in terrorem clauses in Wills and Trusts.