in terrorem clause

(redirected from No-contest clause)
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in terrorem clause

(in tehr-roar-em) n. from Latin for "in fear," a provision in a will which threatens that if anyone challenges the legality of the will or any part of it, then that person will be cut off or given only a dollar, instead of getting the full gift provided in the will. The clause is intended to discourage beneficiaries from causing a legal ruckus after the will writer is gone. However, if the will is challenged and found to be invalid (due to lack of mental capacity, undue influence or failure to have it properly executed), then such a clause also fails. So a prospective challenger takes his/her chances. The courts have ruled that merely putting in a claim for moneys due from the estate is not a legal challenge to the will itself, and is permissible without losing the gift. (See: will, will contest)

References in periodicals archive ?
California law changed in 2010 and now provides in part that a No-Contest clause is unenforceable where a direct contest is brought with "probable cause" to challenge a will or trust based upon:
Similarly, if an institutional trustee inserts a far-ranging no-contest clause in an instrument, the party who profits is not the trustee, but any beneficiary whose gift is vulnerable to judicial challenge.
Likewise, a no-contest clause that favors one beneficiary over another can be construed as a powerful statement about love and trust.
Nevertheless, even the law governing this most basic species of no-contest clause is a patchwork of inconsistent approaches and decisions.
The judge concluded that taken as a whole, the beneficiaries' five-part legal challenge defies the no-contest clause.
The judge pointed out that if the plaintiffs sue the trustees and win, there will be no violation of the no-contest clause.
Now dissidents like the plaintiffs in the Hearst case can go to a judge and ask for a ``safe harbor'' ruling that says their challenge will not violate the no-contest clause.
A third avenue of defense is to include a no-contest clause in the will.
Prevailing American law enforces the no-contest clause unless the contestant can prove probabl cause for bringing the contest.
A lawyer for the estate's executors credits a no-contest clause in the will with being a ``substantial deterrent'' to any challenges.