Written by Attorney Robert Sewell

After a person dies, families frequently fight over the estate of the deceased.  No one who plans for death wants the family to fight over his/her estate.  To prevent fights about the estate, people place poisonous pills in their will or trust to disinherit the person who files a lawsuit or somehow protests the administration.  These clauses are called “in terrorem” clauses.  They are designed to “frighten” or cause “terror” in someone who might be tempted to file a lawsuit. 

Besides not honoring the deceased’s wishes in regards to the estate, lawsuits can and frequently do deplete the estate for every beneficiary of the estate. Paying lawyers is the last thing the deceased wanted to happen to his/her estate. 

In Stewart v. Stewart, et al., a case decided on September 27, 2012, the Arizona Court of Appeals reversed a trial court that ruled against a particularly harsh in terrorem clause. The clause was so harsh that the beneficiary who “cooperates or aids” another in contesting the will or trust was disinherited.  The trial court ruled that such a broad clause violated the public policy of Arizona because Arizona Revised Statute 14-2517, along with case law interpreting it, allows for good faith attacks on wills or trusts, even if unsuccessful. 

In reversing the trial court decision, the Court of Appeals reasoned that the clause only applied to beneficiaries who “voluntarily cooperate or aid a party to contest” the will or trust.  The Court of Appeals further reasoned that a party that brings the lawsuit with probable cause and in good faith has no reason to fear the in terrorem clause as current Arizona law supports those attacks.  The court explained that if a reasonable person at the time of the challenge would believe there was a substantial likelihood of success for a contest or attack, then the in terrorem clause will have no force. 

In making this decision, the Court of Appeals provided significant support to in terrorem clauses and, therefore, ammunition against those special family members.  So, if you anticipate a legal challenge by a family member after you die, it is in the best interest of your estate and your family to contact an attorney who can assist in drafting an in terrorem clause. This will aid in limiting the damage from a lawsuit for your intended beneficiaries and provide peace of mind for you.

For further information about probate, contact Davismiles.com.