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 ?
Insert a no-contest clause that disinherits a beneficiary who contests a will and loses.
230) The comments further explain that this rule "ordinarily" makes an otherwise valid no-contest clause "unenforceble to prevent or punish" a beneficiary who sues if the clause "would inhibit beneficiaries' enforcement of their rights under a trust (whether created by the will or other instrument) or would otherwise undermine the effective, proper administration of the trust.
But see Begleiter, supra note 5, at 645 ("[R]arely will a contest be successful but the no-contest clause be held valid.
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.
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.
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.
One stratagem that many estate planning attorneys opt for is a no-contest clause to be inserted in the documents.
There's a very common technique of putting a no-contest clause in a will," says Nass.