When an In Terrorem Clause May Do More Harm Than Good

An in terrorem clause is not always a net positive. In some estate plans, including one may increase risk rather than reduce it.

The clause may do more harm than good when a beneficiary has little or nothing to lose. If a beneficiary is already substantially disinherited, the threat of forfeiture may carry little deterrent value and may instead invite litigation by removing any meaningful downside to a challenge.

An in terrorem clause can also be counterproductive when there are credible concerns about capacity, undue influence, or fraud. In those circumstances, the clause may heighten suspicion, draw attention to potential weaknesses in the estate plan, and encourage closer scrutiny rather than quiet acceptance.

Where an estate plan relies heavily on trusts—particularly irrevocable trusts—the uncertainty surrounding how no‑contest clauses will be applied can reduce their usefulness. The lack of clear statutory protections in some trust contexts may create unpredictability rather than clarity, increasing the likelihood of disputes over the clause itself.

Finally, an in terrorem clause may exacerbate family conflict rather than deter it. In families with deep or longstanding disputes, the clause can be perceived as punitive or coercive, hardening positions and making compromise less likely.

For these reasons, including an in terrorem clause without careful consideration of family dynamics, beneficiary incentives, and the structure of the estate plan may provide a false sense of security. In some cases, restraint—or alternative planning strategies—may better serve the underlying goals of the estate plan.