“In Terrorem” Clauses

Many wills include provisions that are referred to as “in terrorem” or “no contest” clauses. An example of this type of clause may read, “In the event that any provision of my last will and testament is contested by any of the parties mentioned herein, the portion or portions of the estate to which such party or parties would be entitled shall be disposed of in the same manner as though their name or names had not been mentioned herein.” Essentially, the goal of an in terrorem clause is to attempt to dissuade a beneficiary from contesting a will in court. It should be pointed out that these clauses have no effect on someone who is not a beneficiary under the will submitted for probate – if they have no beneficial interest under the will as it is written, then they have nothing to lose by contesting the will.

Moreover, the presence of a no contest clause does not necessarily mean that a beneficiary will lose their inheritance if they file an action to contest the will. In Ryan v. Wachovia Bank & Trust Co., 235 N.C. 585, 70 S.E.2d 853 (1952), the North Carolina Supreme Court found that in terrorem clauses would not be enforced when the caveat is based on good faith and probable cause. In addition, it is generally held that the provisions of a “no contest” clause are to be strictly construed and not extended beyond their express terms. Haley v. Pickelsimer, 261 N.C. 293, 134 S.E.2d 697 (1964).

If you are a named beneficiary in a will that contains an in terrorem clause and want to contest the will, it is advisable to consult with an attorney prior to doing so, to ensure that contesting the will does not result in the loss of your interest under the will.

Evan Lohr is an estates attorney in Raleigh. He can be reached at evan@lohrnc.com or at (919) 348-9211.

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