Article on In Terrorem Clauses: Are They Still Terrifying?

Gus G. Tamborello published an Article entitled, In Terrorem Clauses: Are They Still Terrifying?, 10 Est. Plan. & Comm. Prop. L.J. 63 (2017). Provided below is an abstract of the Article:

American law generally grants a high degree of freedom to testators. Central to the law of gratuitous transfers is a freedom of disposition. Freedom of disposition has been called the “cornerstone of the Anglo-American law of succession.” Thus, American law acknowledges a right to give rather than a right to receive. A potential beneficiary, even the testator’s child, has a mere expectancy and nothing more.

As part of exercising their freedom of disposition, many testators and settlors insert “no-contest,” “forfeiture,” or “in terrorem” clause language in their wills or trusts in an attempt to deter a beneficiary from challenging the validity of the instrument or taking other action which may thwart the testator’s testamentary plan. In terrorem is Latin for “so as to produce terror by way of threat or intimidation,” or “serving or intended to threaten or intimidate.” The thought is that such a clause would instill terror in the contestant and would persuade the contestant not to challenge the will or trust due to the risk of ending up with nothing. Under a standard scenario, the testator makes a bequest to the beneficiary (although not always) and then inserts a clause which forces the beneficiary to either accept the gift under the will or trust or to contest the instrument with the hope of setting aside the testator’s intended disposition. A typical in terrorem clause is as follows:

“If any devisee or beneficiary under my will or under any trust established under my will shall in any way, directly or indirectly, initiate or participate in any contest, challenge, or attack to the validity of my will or any of its provisions, or object to or contest its admission to probate, or conspire with or give aid to any person doing or attempting any of the foregoing, then in each case all provisions for such beneficiary and his or her descendants herein shall be void and my estate shall be disposed of in the same manner provided herein as if such person had predeceased me leaving no descendants surviving me.”

If the contest is successful, the will is thrown out (and the clause with it), and the beneficiary receives a greater share of property through intestacy or under a prior will under which the contestant may receive a more favorable bequest. If the contest is unsuccessful, the will or trust stands, and the beneficiary forfeits what the beneficiary would have otherwise received under the instrument.