Attorneys love fancy Latin terms. At the end of many wills and trusts, you will usually find a section we proudly call the In Terrorem Provision. Most people will generally refer to such a provision as a “no contest” clause. The intent behind such a term is to dissuade your potential beneficiaries from bringing a frivolous lawsuit. Read more about what these clauses are, how they work, and how they should be used.
What is an In Terrorem Clause?
In terrorem is a Latin phrase that means “to frighten.” The purpose of a no contest clause is to serve as a deterrent to lawsuits brought by a person’s unhappy beneficiaries against his estate. Basically, if an heir challenges his inheritance and loses, he will be disinherited completely and receive nothing from the estate at all!
While this all or nothing approach seems harsh, the policy behind these clauses is to minimize selfish bickering between dissatisfied beneficiaries and the estate while also reducing the need for costly and time-consuming litigation. The United States Supreme Court upheld the use of no contest clauses in Smithsonian Institution v. Meech. In this case, the testator – the creator of a will – left the majority of his estate to the Smithsonian Museum and only a few token gifts to his other relatives. When a suit was brought by these relatives alleging that the gift to the Smithsonian was improper, the Supreme Court did not agree. It found that a person cannot receive a gift from a will while simultaneously challenging its provisions. Further, such a clause preserves the testator’s true intentions and donative intent, especially now that the person is not here anyore to speak for himself.
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