Video: In Terrorem or No Contest Clauses

An In Terrorem (or No Contest) clause is a special provision you may want to include in your Will or Revocable Trust. The provision says that a beneficiary who challenges your Will or Trust (by filing a Will contest or other lawsuit) forfeits her interest (i.e., gives up assets or money that would pass to her). The reason to include the provision is to avoid a challenge or lawsuit from an unhappy beneficiary after you’ve died.

If you wish to disinherit a child, I may recommend instead that you leave some assets – such as a cash gift – to the child and also include in the Will and Revocable Trust an in terrorem clause. Then, if the child contests, she forfeits the cash gift. The gift and the in terrorem clause work together to discourage the contest – the gift is the “carrot” and the in terrorem clause is the “stick.” Even if you are providing for a child, but feel the child is still likely to contest, you may wish to include an in terrorem clause to discourage a costly and protracted lawsuit.

In terrorem clauses are valid and enforceable in Massachusetts, although not everywhere.

To learn more, watch my video.