How an In Terrorem Clause Can Be Used In NY to Protect Your Estate Plan

When engaging in estate planning, one of your goals is likely to prevent or minimize fighting within your family after your death.  A qualified estate planning attorney can help you achieve this goal by drafting your Will and/or Trust in clear and simple terms and to make sure all the technical requirements of execution are properly observed. Unfortunately, in cases where a disgruntled family member feels that they are being treated unfairly, more than clear drafting may be required.  Fortunately, New York estate law allows you to use an estate planning tool called an “In Terrorem” clause to help prevent litigation after your death.

An In Terrorem Clause (otherwise known as a “no contest” clause) is an instrument that can be used by a Testator (person making a will) to deter the beneficiaries of their Will or Trust from bringing a court proceeding objecting to the estate planning document and its terms.  Put more simply, a no contest clause can be inserted into your will or trust to deter your heirs from contesting what you have decided to do with your property at your death.

An In Terrorem Clause will state that any beneficiary who brings a legal challenge to the Last Will and Testament (or Trust) will forfeit any gifts or bequests made to them if their challenge fails in court.  These provisions are commonly drafted such that the beneficiary in question will be deemed to have predeceased the testator without issue (children or grandchildren) and therefore the amount devised to them will be split amongst the remainder of the heirs.

A no contest clause is only an effective deterrent to your heirs if you have provided them with a meaningful bequest inside the will or trust. For example, if you have an estate worth two million dollars and you left one of your two children $5,000 and the remainder to your other child.  The $5,000 bequest may not be a sufficient deterrent to prevent that child from contesting your estate plan because the amount they stand to gain is much larger than the $5,000 bequest.  Therefore, if you have concerns that one of your heirs will have an issue with the terms of your will (possibly because they feel they have been treated unfairly), and you choose to insert an In Terrorem clause into your estate planning document, the clause will not have the intended effect if you have not made a significant bequest to that heir and will certainly provide no deterrent at all if you have disinherited them completely.

No contest clauses are not enforceable in every state, but they are permitted in New York.  A New York court will enforce the clause unless they have found that the will contest was made in good faith or based upon probable cause that the will was revoked or is a forgery, or if the person bringing the claim is a minor or incompetent.  Additionally, a disgruntled party requesting 1404 examinations, as discussed in a prior will contest article, will not trigger the clause unless objections are filed.  Further, the clause may not necessarily apply to all the terms of the Will - while a particular no contest clause may apply to bequests made to an heir, it may not prevent them from challenging the qualifications of the nominated Executor or Trustee.

If you suspect your wishes regarding the distribution of your property at your death may potentially lead to a beneficiary challenging your Will or Trust, speak to our estate attorneys for a free consultation about the possibility of including an In Terrorem clause in your plan. You can call the Law Offices of Roman Aminov, P.C at 347-766-2685 for a free consultation

This article is for educational purposes only - to provide you general information, not to provide specific legal advice.  Use of this post does not create an attorney client relationship and information contained herein should not be used as a substitute for competent legal advice from a licensed attorney in your state.

 

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Attorney Advertising Disclaimer: The estate planning, probate, elder law or other New York legal information presented on this site should NOT be construed to be formal legal advice nor the formation of a lawyer or attorney client relationship. Using the advice provided on this site without consulting an lawyer can have disastrous results. Prior results do not guarantee similar outcomes. Please contact a Queens estate planning attorney at one of our law firms located in New York City. This web site is not intended to solicit clients for matters outside of the State of NY, although we have relationships with attorneys and law firms in states throughout the United States. Free consultation applies to an initial phone consultation.
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