David Horton, UC Davis School of Law, and Reid K. Weisborad, Rutgers Law School, have made available for download their forthcoming article, Boilerplate No Contest Clauses, to be published at 83 Law & Contemporary Problems (2020, Forthcoming). The Abstract is as follows:
Testators sometimes use “no contest clauses”: terms that disinherit anyone who files litigation against the estate. This invited contribution to Law and Contemporary Problems’ special issue on The Butterfly Effect in Boilerplate Contract Interpretation examines whether no contest clauses are a symptom of a larger pathology: attorneys relying on standardized terms without ascertaining the testator’s informed preferences.
We flagged this overarching problem in a previous paper, Boilerplate and Default Rules in Wills Law: An Empirical Analysis. In that piece, we studied 230 wills from Sussex County, New Jersey, and discovered that they were riddled with stock terms that sounded authoritative, but made little sense in context. Alarmingly, this language often over-rode majoritarian default rules (principles that try to fill gaps in a will with a result that dovetails with most testators’ wishes). Thus, we urged courts and lawmakers to reinforce certain background principles by making them “sticky” (harder to draft around).
This Article builds on this foundation by reviewing no contest clauses in 457 wills that were probated in Alameda County, California in the late 2000s. We show that testators and their lawyers overuse no contest provisions. Indeed, these terms appear in nearly 70% of the wills in our sample, including many estates in which there is no realistic possibility of discord. Thus, we conclude that some no contest provisions are intent-thwarting boilerplate.
We then offer evidence that sticky default rules can help combat this problem. In 1994, the California Supreme Court decided Burch v. George, which interpreted a no contest clause expansively. In 2001, the state legislature responded to concerns that testators did not appreciate the capaciousness of no contest clauses under Burch by passing Probate Code section 21305. This statute declares that certain types of lawsuits (such as creditor’s claims) and instruments (like codicils) do not trigger contest penalties unless the testator explicitly directs otherwise. This choice architecture makes section 21305 a sticky default: it “nudges” testators toward accepting a favorable background principle by increasing the cost and effort required to opt out. The wills in our sample reveal that the statute may also have made no contest clauses more visible to testators and attorneys. Indeed, after 2001, the following statistically significant changes occurred: (1) fewer testators included a no contest clause, (2) more wills featured a custom-made no contest provision, and (3) even controlling for other variables through a logit regression analysis, odds of finding a seemingly gratuitous no contest terms declined. These findings support our claim that sticky defaults can serve as an antidote to the careless use of boilerplate in wills.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal..