In recent years, estate practitioners have seen an increase in the use of in terrorem clauses as an estate planning tool. In terrorem clauses, also referred to as "no contest" provisions, are conditions placed by a testator or grantor upon bequestsusually to discourage beneficiaries from challenging the provisions of a will or trust. These provisions are attractive to many clients because they discourage frivolous or so-called "strike suits" and they tend to settle estates quickly. Under certain circumstances, in terrorem clauses provide that beneficiaries forfeit their rights or interests under a will or in a trust to the extent that they trigger the condition in the provision. For this reason, they are disfavored and strictly construed under New York law; however they are generally enforceable.
Estate Powers and Trust Law §3-3.5 and its predecessors are an attempt by the New York State Legislature to balance the competing interests of testators to avoid challenges to their testamentary wishes, and of beneficiaries to make informed decisions as to the merits of any probate objections they might file. EPTL 3-3.5 sets forth a non-exhaustive list of "safe harbor" provisions which shield beneficiaries from triggering in terrorem clauses contained in testamentary instruments.
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