Questioning New York’s Exemption of Infants from In Terrorem Clauses

Peter G. Billlings (J.D. Candidate 2009, Quinnipiac University) has published his note entitled Infants and in Terrorem Clauses: Rethinking New York Estate Powers and Trusts Law Section 3-3.5, 22 Quinnipiac Prob. L.J. 397 (2009).

The introduction from the article is below:

It has been estimated that $41 trillion will be transferred from the baby boomer generation to their children and subsequent generations. As the use of a will has become ever more common, much of this intergenerational wealth transfer will pass pursuant to a will. Thus, it is particularly noteworthy that will contests are now used more frequently than ever before – in fact, such challenges are now becoming common.

In light of this, it is only logical that testators will seek to prevent such contests. A common tool used to deter a will contest is an in terrorem clause. In essence, an in terrorem clause provides for the forfeiture of a beneficiary’s interest in the decedent’s estate should the beneficiary contest the will. Thus, the increasing rise in both will contests and the use of in terrorem clauses has the combined effect of increasing the estates in which these in terrorem clauses will be triggered.

This note focuses on a New York statute that exempts infantsfrom in terrorem clauses and argues that this statute is poor public policy in light of New York’s overall treatment of in terrorem clauses. Part II of this note will begin with a discussion of those jurisdictions that have held that in terrorem clauses are enforceable against infants. Part II will go on to outline the reasoning put forth by these decisions and will conclude by discussing the criticisms of this reasoning. In contrast, Part III will address those jurisdictions that have reached the opposite result – that in terrorem clauses are unenforceable against infants. Part III will also discuss the reasoning behind those results and, as in Part II, will conclude by discussing the criticisms of this reasoning.

Following this overview of these various approaches, Part IV will turn to the main focus of this note – New York Estates Powers and Trusts Law section 3-3.5(b)(2) (hereinafter “section 3-3.5(b)(2)”), which specifically exempts infants from in terrorem clauses. In doing so, Part IV will outline the early case law and the accompanying reasoning that eventually led to the enactment of section 3-3.5(b)(2). Finally, Part V will argue that section 3-3.5(b)(2) is unnecessary and is in fact poor public policy in light of New York’s larger statutory scheme that addresses in terrorem clauses in general.