in terrorem clause

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In terrorem clauses (also known as contest clauses, no-contest clauses, anti-contest clauses, and forfeiture clauses) are clauses in a will that impose a condition upon a devisee or legatee that they will not dispute the provisions of a will. Such clauses are used to discourage challenges to a will and keeping the will out of a long probate by revoking a beneficiary's interest or inheritance if the beneficiary violates the clause. These clauses are generally enforceable in most states but are often disfavored and subject to strict construction, such that they do not grant or hold absolute authority over the distribution of the testator's interests. The extent of enforceability and limitations differ greatly between states.

Many states limit the enforceability of in terrorem clauses to ensure beneficiaries can challenge fraudulent conduct or other conduct against public policy. For example, New York courts have held that in terrorem clauses that attempt to preclude a beneficiary from questioning the eligibility or conduct of a fiduciary will not be enforced because it goes against public policy and is assumed as against the intentions of the testator (See In re Estate of Prevratil). 

Moreover, some jurisdictions have established a probable cause exception to in terrorem clauses. For example, California courts have held that they may decline to enforce in terrorem clauses where "the beneficiary challenging the will acted in good faith and had probable cause for the challenge" (See Estate of Gonzalez). Under this exemption, "probable cause" is defined as "the existence . . . of evidence which would lead a reasonable person . . . to conclude that there is a substantial likelihood that the contest or attack will be successful." The probable cause exemption is used to protect legitimate challenges to wills, and probable cause can be found in evidence indicating that a will may be legally invalid, such as undue influence on the testator or forgery of the will. 

While not all jurisdictions have adopted a probable cause exemption, other exemptions have been recognized. Georgia is an example of such a jurisdiction, and its courts have instead held that in terrorem clauses are void unless the will contains directions to how property will be allocated if the clause is violated (See Duncan v. Rawls). Therefore, under Georgia law, in terrorem clauses do not only have to contain the condition that the challenger of the will shall lose their interest, but where that interest will be reallocated as well. 

In Florida, in terrorem clauses are unenforceable by statute.

In deciding the enforceability of in terrorem clauses, courts will interpret the will as a whole to ascertain the intent of the testator. As a result, a challenge to a will, even in the face of an in terrorem clause, will succeed if the challenge is consistent with the intent of the testator in drafting their will.

[Last updated in August of 2023 by the Wex Definitions Team]