The Old No Contest Clause (fiduciary litigation attorney)

Posted on Nov 2, 2015 in challenging a last will and testament

The Old No Contest Clause (a/k/a in terrorem clause)- In this situation, the testator, anticipating one of the beneficiaries might challenge the will and how little they’re getting compared to what they thought they’d get, puts one of these clause in his or her will.

The No Contest Clause basically says “If any of my beneficiaries challenges my Last Will And Testament or a term herein, then they shall receive nothing from my estate.”

However, the presence of a no contest clause does not exactly mean that a beneficiary will lose their inheritance if the beneficiary files an action to contest the will.

Ryan v. Wachovia Bank & Trust Co., 235 N.C. 585, 70 S.E.2d 853 (1952), the NC  Supreme Court found that in terrorem clauses (No-Contest Clauses) would not be enforced when the will contest (Will Caveat) is based on good faith and probable cause.

Furthermore, the Courts have ruled that the provisions of a “no contest” clause are to be strictly construed. Plus they are limited to their express terms and nothing more. See Haley v. Pickelsimer, 261 N.C. 293, 134 S.E.2d 697 (1964).

So, if a beneficiary has a valid, good faith challenge to an estate or last will, in NC a no contest clause is not an automatic deterent. Please note, each case & each no contest clause should be discussed with an attorney. Every document and case is dependent on too many factors.

Call Kirk Sanders to handle your Estate Litigation matters in NC and Fiduciary Litigation cases.