What New York Lawyers Should Know About In Terrorem Clauses in Wills and Trust Agreements
9.2.2025
“In terrorem” is a Latin phrase meaning “in order to frighten.”[1] When a last will and testament and/or a trust (revocable or irrevocable) agreement contains an in terrorem clause it means, in simple terms, that if a beneficiary challenges the validity of a will or trust agreement and that challenger loses the will or trust contest, the challenger will forfeit their bequest(s). By contrast, if the challenger prevails and the will is denied probate or the trust agreement is set aside, the in terrorem clause is a nullity with no force or effect.
The purpose of an in terrorem, or no contest, clause is generally to “discourage challenges” to the instrument that “would upset the grantor’s distributive intent.”[2] It is ironic that a testator or grantor often wishes to insert an in terrorem clause into their instrument to prevent will or trust contests, yet in reality, challenges to instruments containing such clauses are by no means unusual.
Challenges to wills and trusts are typically based upon grounds that the instrument was not duly executed, the testator or grantor lacked capacity, or the instrument was procured by undue influence, duress, or fraud.
It is clear that under New York law, in terrorem clauses are “not favored and must be strictly construed.”[3] Practitioners, though, face difficult issues when a client seeks advice as to whether to file objections to the probate of a will in Surrogate’s Court or whether to file an action in Supreme Court (or Surrogate’s Court) to set aside a trust agreement that may result in triggering an in terrorem clause.
In a recent Court of Appeals decision, Carlson v. Colangelo,[4] the court analyzed for the first time an in terrorem clause in a trust agreement. Sixteen years ago, the Court of Appeals provided guidance on in terrorem clauses in wills in Matter of Singer.[5] However, uncertainty remains, especially with respect to litigation on in terrorem clauses in trust agreements. Practitioners must be wary when advising clients of their litigation options.
Differences Between Wills and Trusts in the Context of In Terrorem Clauses
One key difference in counseling clients on in terrorem clauses in wills or trusts is the “effective date” of each instrument and the absence of statutes pertaining to in terrorem clauses in trust agreements. In New York, a “propounded instrument” (not deemed a will until it is admitted to probate) is offered for probate in Surrogate’s Court and is only admitted to probate when the surrogate is satisfied that the “propounded instrument” is a valid will of the decedent.[6] During a probate proceeding, decedent’s distributees or heirs at law are notified (by citation) of the pending probate proceeding. If a will contains an in terrorem clause, beneficiaries are entitled to conduct limited pre-objection discovery under the Surrogate’s Court Procedure Act 1404(4)[7] (i.e., depositions of the attesting witnesses, attorney-drafter, and the nominated executors and proponents) before deciding whether to file objections to the probate of the propounded instrument. Safe harbor provisions under Estates, Powers & Trusts Law 3-3.5(b)(3)(E)[8] include “[t]he institution of, or the joining or acquiescence in a proceeding for the construction of a will or any provision thereof.”
In contrast to wills, a revocable or irrevocable trust is valid upon its due execution (like a contract). If all of the decedent’s “probate assets” are properly transferred to the trust prior to death, then probate of a decedent’s last will and testament can be avoided entirely. A trust beneficiary may not receive notice that he or she is a beneficiary for years after the decedent’s death. While courts apply the safe harbor provisions, EPTL 3-3.5 and SCPA 1404(4), to trust contests, there are no statutes specifically dealing with in terrorem clauses in trust agreements.
Court of Appeals Opinions Concerning In Terrorem Clauses in Wills and Trusts
Matter of Singer[9] held that a decedent’s son did not violate two in terrorem clauses in his father’s will when he took the deposition of a witness, his father’s former attorney who drafted decedent’s nine prior wills and who was not listed in the then existing “safe harbor” provisions of SCPA 1404(4).[10] In reaching its decision, the court held that “[i]nterpreting these [in terrorem] clauses narrowly will allow surrogates to address on a case-by-case basis whether the conduct undertaken is in keeping with the testator’s intent.”[11] Following Singer, the Legislature in 2011 amended EPTL Section 3-3.5 and SCPA Section 1404 to broaden pre-objection discovery in probate proceedings for wills containing in terrorem clauses.
In Singer, the Court of Appeals reaffirmed the longstanding public policy that “while in terrorem clauses are enforceable, they are ‘not favored and [must be] strictly construed.’”[12] However, the court never addressed the narrow issue of an in terrorem clause in a trust agreement until Carlson v. Colangelo. In Carlson, the Court, in a 4-3 opinion written by Judge Rivera, modified an order of the Appellate Division, Second Department, and held that plaintiff Carlson did not violate an in terrorem clause in a trust agreement.[13]
Carlson v. Colangelo
Donald P. Dempsey (grantor) made a pour-over will and revocable trust. In his trust, Dempsey bequeathed to Kristine Carlson: (a) a house (“premises”); and (b) “a stream of income” of up to $350,000. Crissy Colangelo, the daughter of one of Dempsey’s former girlfriends, was named as the trustee and residuary beneficiary of the trust. Dempsey also gave Colangelo all of his interest in a company called Dempsaco LLC.
The trust (and the will) contained an in terrorem clause, which resulted in a forfeiture of any bequest if a beneficiary “shall contest any aspect of this Trust, or the distribution of the Grantor’s assets pursuant to his Last Will, inter vivos Trust Agreement, beneficiary designations or non-probate beneficiary designations, or shall attempt to set aside, nullify, contest, or void the distribution thereof in any way . . . .”[14]
Carlson commenced an action against the trustee and Dempsaco in the Supreme Court, Westchester County. In the complaint, she sought distribution of her bequests, and an accounting, and also alleged that she invested $100,000 with Dempsey in Dempsaco, and as a result was a 50% owner of Dempsaco. Following limited discovery, the Supreme Court granted the trustee’s first motion for partial summary judgment, holding that plaintiff failed to establish an ownership interest in Dempsaco.[15] Thereafter, the Supreme Court granted defendants’ second motion for summary judgment and held that plaintiff forfeited her bequests, including the premises to which she was otherwise clearly entitled, by unsuccessfully claiming a 50% ownership interest in Dempsaco and thus triggering the in terrorem[16]. The Supreme Court awarded attorneys’ fees to defendants.[17] On appeal, the Appellate Division, Second Department, modified the Supreme Court’s order by denying defendants’ motion for attorneys’ fees, but otherwise affirmed.[18]
The Court of Appeals held:
“because plaintiff’s lawsuit seeks to enforce the Trust provisions as written and intended by the grantor, plaintiff did not attempt to nullify the Trust or challenge its terms. Thus, plaintiff did not violate the in terrorem clause and defendant is not entitled to summary judgment. We further conclude that plaintiff has established her right to summary judgment on her first cause of action regarding her ownership rights to the Premises and her motion should be granted to that extent.”[19]
In finding that Carlson did not trigger the in terrorem clause by asserting a 50% ownership interest in Dempsaco, the court held:
“[n]owhere does the Trust declare that the grantor is the sole member of Dempsaco or that he holds a 100% interest in the company. . . Since Dempsey could only transfer to Colangelo his own interests, plaintiff’s action to recognize her alleged 50% membership in Dempsaco is not a challenge to the Trust’s distribution of any part of Dempsey’s interest in the company. Plaintiff merely seeks what is hers and nothing more.”[20]
In reaching its decision, the court pointed out that the “triggering event depends on the nature, and not the merits, of the plaintiff’s claim.”[21] Thus, despite the lower court’s finding that Carlson did not own a 50% interest in Dempsaco, the court held that the nature of Carlson’s claim did not “trigger” the in terrorem clause. In response to plaintiff’s position that the trustee violated the public policy of this state by demanding an indemnification agreement as a prerequisite to receiving her legacy, the court held that the “Supreme Court erroneously held that plaintiff’s public policy claim ‘is trumped by Plaintiff’s disregard for Grantor’s last wishes’ . . . [P]laintiff’s action to protect her interest in the Premises was wholly consistent with the grantor’s intent. ”[22]
The Upshot of Carlson: Tread Carefully When Advising Clients On In Terrorem Clauses
What is the significance of Carlson? The Court of Appeals unequivocally held that in terrorem clauses in trust agreements, like those in wills, are enforceable, but not favored, and must be strictly construed consistent with New York’s longstanding public policy. In addition, “the purpose of [an] in terrorem clause is to discourage challenges to the Trust that would upset the grantor’s distributive intent,” and thus, an action “meant to require the Trustee to distribute the Trust in accordance with its stated provisions, is not a challenge to the grantor’s distributive plan.”[23]
How should attorneys counsel clients on litigation options on trust agreements with in terrorem clauses? Triggering an in terrorem clause will result in forfeiture of a bequest, and the safe harbor provisions of EPTL 3-3.5 and SCPA 1404 only apply to prospective will contests. Specifically, there are no statutes in the EPTL or SCPA that deal specifically with in terrorem clauses in trust agreements, and neither the EPTL nor the SCPA sets forth procedures for litigation concerning trust agreements.
In Carlson, the trust did not provide any direction for either the timing of the trustee’s distribution of $350,000 or a definition of “stream of income.” Carlson argued that there was a construction issue, presumably protected by the safe harbor provisions of EPTL 3-3.5(b)(3)(E), but there is no such analogous statute and resulting action in connection with trust agreements.
Various bar groups are studying the issues raised above and are working on a proposed statute that provides safe harbor protection for potential challenges to trust agreements that contain an in terrorem clause. However, until such legislation is adopted, practitioners must be wary when advising clients of potential litigation that may trigger an in terrorem clause in a trust agreement.
Irma K. Nimetz and Frank W. Streng are partners at McCarthy Fingar and are co-chairs of the firm’s estate & trust litigation practice group. They co-authored the briefs in the Court of Appeals on behalf of plaintiff-appellant Kristine M. Carlson. Nimetz argued the appeal.
Endnotes:
[1] “In Terrorem,” Black’s Law Dictionary (12th ed. 2024).
[2] Carlson v. Colangelo,, 2025 N.Y. Slip Op. 02264, at *5.
[3] 2025 N.Y. Slip. Op. 02264 at *3.
[4] 2025 N.Y. Slip Op. 02264.
[5] 13 N.Y.3d 447 (2009).
[6] See SCPA 1408.
[7] SCPA 1404 “Witnesses to be examined; proof required,” provides in paragraph 4:
- In all cases the proofs must be reduced to writing. Any party to the proceeding, before or after filing objections to the probate of the will, may examine any or all of the attesting witnesses, the person who prepared the will, and if the will contains a provision designed to prevent a disposition or distribution from taking effect in case the will, or any part thereof, is contested, the nominated executors in the will and the proponents and, upon application to the court based upon special circumstances, any person whose examination the court determines may provide information with respect to the validity of the will that is of substantial importance or relevance to a decision to file objections to the will. No person who has been examined as a witness under this section shall be examined in the same proceeding under any other provision of law except by direction of the court. The attesting witnesses, the person who prepared the will, the nominated executors in the will and the proponents may be examined as to all relevant matters which may be the basis of objections to the probate of the propounded instrument. There shall be made available to the party conducting such examination, all rights granted under article 31 of the civil practice law and rules with respect to document discovery.
[8] EPTL 3-3.5, “Conditions qualifying dispositions; conditions against contest; limitations thereon” provides, in part, that:
(b) A condition, designed to prevent a disposition from taking effect in case the will is contested by the beneficiary, is operative despite the presence or absence of probable cause for such contest, subject to the following:
* * *
(3) The following conduct, singly or in the aggregate, shall not result in forfeiture of any benefit under the will:
* * *
(E) the institution of, or the joining or acquiescence in a proceeding for the construction of a will or any provision thereof.
[9] 13 N.Y.3d 447 (2009).
[10] 13 N.Y.3d 447, 453 (2009).
[11] Id.
[12] Id. at 451 (citations omitted).
[13] 2025 N.Y. Slip Op. 02264.
[14] Carlson v. Colangelo, 2025 N.Y. Slip Op. 02264, at *1.
[15] Carlson v. Colangelo, 2021 N.Y. Slip Op. 32928(U) at *4 (Sup. Ct., Westchester Co. 2021).
[16] Carlson v. Colangelo, 2022 N.Y. Slip Op. 34678(U) at *3 (Sup Ct., Westchester Co. 2022).
[17] Id.
[18] Carlson v. Colangelo, 221 A.D.3d 773 (2d Dep’t 2023).
[19] Carlson v. Colangelo, ,2025 N.Y. Slip Op. 02264, at *3.
[20] Id. at *4.
[21] Id.
[22] Id. at *6-*7. The dissent (written by Judge Garcia) charged that
[t]he majority’s holding…based on a false construct that plaintiff ‘merely sought to enforce’ the provisions of the Trust, ignores both our longstanding approach to the construction of testamentary documents and plaintiff’s conduct . . .” Id. at * 7.
. . .
Taken to its logical end, under the majority’s approach, a challenger could claim, without any support, that decedent had no interest in any of the trust property, that the trust had no property at all to distribute, and that challenger owned all the trust’s property-and then avoid the consequences of an in terrorem clause by claiming the suit was merely an effort to ensure that the grantor’s intent was fulfilled. Id. at *10.
[23] Id. at *5.
