A donor who creates a will or trust has the ability to deter beneficiaries from challenging his or her will by including a “no contest” clause (“NCC”) or, to use the Latin term, an in terrorem clause. A person creating a will or trust should consult with counsel before inserting a NCC to understand whether and under what circumstances it would be enforced. On the other hand, when a NCC is included in a will or trust, before taking any affirmative steps to challenge a will, a beneficiary who feels the will was improper should first consult with counsel about what actions might violate the NCC, potentially resulting in a loss of all inheritance by the beneficiary.

An NCC may be included in a will or in a trust. Typically an NCC provides that any beneficiary who challenges the dispositions under the will or trust is barred from receiving anything and provides that their share is redirected to other beneficiaries. Terms of NCC’s vary widely, and the law relating to enforceability or application of an NCC to a given situation is very fact-specific, meaning courts must examine each set of facts, including the language used in the NCC and the conduct that is claimed to be in violation of it. NCCs are considered “forfeiture provisions” which are not favored by the law, so they are interpreted narrowly. Put differently, for an NCC to prohibit a challenging beneficiary from receiving their bequest, the court will have to find that it is clear the donor intended the conduct at issue to result in a forfeiture of the bequests.

In addition, almost every state limits the enforceability of NCCs under certain circumstances, and in Florida, NCCs are not enforced at all. So the court must also determine if the NCC violates the law or public policy of the state. For example, a state may deem an NCC unenforceable if it is so broad that it would deter a beneficiary from challenging the improper actions of a fiduciary or if it relates to the administration of a trust by prohibiting a petition to remove a trustee from a trust where the trustee has acted improperly. South Dakota and Nevada are states which have enacted specific statutes that make NCCs inapplicable to actions relating to trust administration.

If an NCC is enforceable under the applicable state law, then the terms of the particular NCC must be carefully analyzed to determine if the conduct of the beneficiary was the type of contest prohibited by the NCC. As noted above, courts apply NCCs narrowly because they result in a forfeiture, and courts are discouraged from finding a forfeiture. A court may look to whether the conduct at issue relates to a will or trust that was in effect at the time the NCC was created. For example, if the donor executed a will with a NCC in 1990, then created a new trust in 2000 which a beneficiary challenged, the court may determine that the NCC only applied to wills or trusts in existence in 1990 when the will was created, and that it did not apply to a challenge to a trust created in 2000.

Even if the conduct of the beneficiary is deemed a violation of the NCC, a court generally will not enforce a forfeiture under the NCC if the contest was supported by “probable cause.” A contestant can establish probable cause by showing he or she was aware at the time of filing the contest of facts that established a reasonable likelihood of success. In other words, most courts will not enforce a NCC against a beneficiary who challenges a will or trust on incapacity or undue influence grounds if the court finds that the beneficiary had a good reason to bring the challenge. Thus, NCCs often force beneficiaries to make a difficult decision—challenge an amendment to a will or trust and risk losing all inheritance, or accept the reduced inheritance in the amended will or trust. 

A decision to include an NCC in a will or trust can be an effective way to deter beneficiaries from engaging in litigation after a donor has passed away, but whether such a clause will be enforced depends upon the state law that applies, the language used in the NCC, and whether the contest is supported by probable cause. A person considering including an NCC in a will or trust should consult with counsel and carefully consider their options, whereas a person considering challenging a will or a trust should also consult counsel to understand the risks of such an action.