Although it may be hard to say, an In Terrorem clause is something everyone should consider adding to their estate planning documents. Here’s why.
What is an In Terrorem Clause?
The In Terrorem, or no contest, clause is basically a legal threat that is included in the will or trust to prevent the beneficiaries from challenging the planning. The result of a legal contest from a beneficiary would likely be disinheritance. There are states that do not recognize In Terrorem, but most states will uphold these no contest clauses to varying degrees.
How do No Contest Clauses Work?
No contest clauses in a trust or will are designed to protect the desires and intentions of the decedent from the legal attacks of belligerent or disgruntled beneficiaries. These individuals would risk complete disinheritance by challenging the terms of the will or trust. One major benefit of including the no contest clause is found in the meaning of the latin “in terrorem” which can be roughly translated as “into fear”. Beneficiaries will often choose to mind their manners for fear of total disinheritance.
What Happens When Someone Still Challenges the Will?
If someone contests a trust or will that includes an in terrorem clause, the courts in many states will look for probable cause. If they do not find probable cause for the challenge, then the in terrorem clause is typically enforced. Some no contest clauses will leave the challenging beneficiary with one dollar, but this too can have its drawbacks. As a beneficiary, that individual will still have many legal rights to information concerning the estate. Leaving that individual with nothing legally removes them from the equation. If probable cause is found for the challenge, then the contest can proceed to court. If the challenging beneficiary does not win, then the original terms of the will are typically upheld, however the no co-tntest clause would not result in disinheritance.
Conclusion: Your Will, Your Way
If you have any concerns that one or more of your beneficiaries may cause some trouble or be unhappy about your planning documents, an In Terrorem clause may be right for you. Contact your estate planning attorney today to ensure that your legacy is protected and your will or trust will be executed the way you would like it to be.
To listen to our full podcast about no contest clauses click here.