A no-contest clause or an "in terrorem" clause is a provision in a testamentary instrument that is meant to discourage beneficiaries from disputing a will. This clause is typically used to threaten to disinherit a beneficiary of the will should the beneficiary challenge the terms of the will in a court action, thereby forcing disgruntled beneficiaries to comply with the provisions of the will.
The inclusion of no-contest clauses in wills insures that a testator's (person who made the will) wishes and directions are carried out without question or frivolous litigation. In California, any person executing a testamentary instrument can include a no-contest provision. An example of a no-contest clause is as follows:
If a beneficiary under this will attacks or contests any provision found in the will, any bequest granting an interest or share to the contesting beneficiary shall be revoked. A contesting beneficiary will receive no part of the estate.
However, in 2008, then Governor Arnold Schwarzenegger signed Senate Bill No. 1264 into law, repealing the existing no-contest rules and replacing it with Probate Code section 21310 et seq. The law took effect on January 1, 2010 and applies retroactively to any instrument that became irrevocable on or after January 1, 2001.
Stay tuned for more on this topic on our subsequent blog.
*This blog entry was not written by an Attorney and should not be construed as professional legal advice.