People use in terrorem clauses to discourage estate litigation.
By threatening forfeiture, the person creating the estate plan is attempting to reduce the likelihood that a beneficiary will challenge the will or trust after death.
The purpose is deterrence. The clause is meant to make a beneficiary think carefully before starting a legal fight.
These clauses are most often included when the person anticipates disagreement, resentment, or conflict among beneficiaries, or when prior family disputes make litigation likely.
They are especially common when:
Family relationships are strained
Children are treated unequally
There are second marriages or blended families
Prior disputes already exist
The person fears a challenge based on emotion rather than merit
At a practical level, an in terrorem clause is intended to protect the estate plan from delay, expense, and uncertainty by raising the cost of bringing a challenge.
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