What is an “In Terrorem” or “No Contest” Clause in a Will or a Trust?
The term “In Terrorem” is a legal Latin term that translates to “in terror”. Today, most lawyers prefer to use the term “no contest”. A “No Contest” clause in a will may be added by the Testator of the will. This clause states that if an heir or beneficiary attempts to challenge the will in court – and if they subsequently lose – that heir or beneficiary will not inherit anything under that will. This clause is meant to deter heirs from challenging the will in court and preventing frivolous litigation that can delay an estate’s administration.
Are “No Contest” Clauses Enforceable?
This depends on the state you live in, as “No Contest” clauses are not always enforceable in every state. In states that do recognize “No Contest” clauses, courts will look at the circumstances surrounding the claim being brought to determine whether or not to enforce the clause. This would depend on whether the plaintiff challenging the will has brought the claim “in good faith” and has probable cause. On the other hand, if a state does not recognize “No Contest” clauses as valid, the circumstances surrounding the claim challenging the will often will not matter.
Is a “In Terrorem” or “No Contest” Clause Valid in Florida?
“No Contest” clauses are not enforceable in Florida as they are against public policy. Section 736.1108(1) of the Florida Statutes governs the enforceability of “No Contest” clauses in Florida. It states that “[a] provision in a trust instrument purporting to penalize any interested person for contesting the trust instrument or instituting other proceedings relating to a trust estate or trust assets is unenforceable.”
Similarly, Section 732.517 of the Florida Statutes states: “A provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable.”
Is a “In Terrorem” or “No Contest” Clause Valid in DC?
Yes, “No Contest” clauses are valid and enforceable in Washington, D.C. This was decided by a District of Columbia court in the famous case of Ackerman v. Genevieve Ackerman Family Trust, 908 A.2d 1200 (D.C. App. 2006).
An example of a “No Contest” clause is: “If any beneficiary of my estate in any manner, directly or indirectly, contests the probate or validity of this Will or any of its provisions, or institutes or joins in, except as a party defendant, any proceeding to contest the probate or validity of this Will or any trust created hereunder or to prevent any provision hereof from being carried out in accordance with the terms hereof, then all benefits provided for such beneficiary (and such contesting beneficiary’s descendants) are revoked and shall pass as if that contesting beneficiary (and such contesting beneficiary’s descendants) had failed to survive me.”