When Should an Estate Plan Include an In Terrorem Clause?

An in terrorem clause is not a default provision. It is a strategic drafting choice.

Including a no‑contest clause makes the most sense when the person creating the estate plan expects that a beneficiary may be dissatisfied but is still receiving something of value under the plan. In that context, the clause operates as a deterrent by forcing the beneficiary to weigh the risk of forfeiture against the potential gain from a challenge.

An in terrorem clause is often considered where family dynamics suggest a heightened risk of litigation, such as blended families, unequal distributions, or prior conflicts among beneficiaries. In these situations, the clause is intended to reinforce the testator’s or grantor’s intent by raising the cost of contesting the plan.

The clause is less effective when a beneficiary is already substantially disinherited. If a beneficiary has little or nothing to lose, the threat of forfeiture may have limited practical impact, and the clause may not meaningfully reduce the likelihood of a challenge.

Drafting considerations also include the structure of the estate plan. The effectiveness and predictability of an in terrorem clause can differ depending on whether it appears in a will, a revocable trust, or an irrevocable trust, and on how the governing law treats forfeiture provisions in each context.

Ultimately, an in terrorem clause is most useful when it aligns with the realities of the estate plan: who is benefiting, who may be inclined to challenge it, and whether the clause meaningfully changes a beneficiary’s incentives. Including the clause without regard to those factors may provide a false sense of security rather than meaningful protection.