While there may be several good ways to go about challenging a decedent’s last will and testament, in In the Matter of the Estate of Annie Rost, Superior Court of New Jersey, Appellate Division (Docket No. A-1807-19) decided April 8, 2021, the challenge brought by the decedent’s daughter failed with the result being that she lost her inheritance.
“Annie Rost died in September 2018, leaving behind a sizeable estate. Her will, executed in 2002, devised the estate among her four children and to various charities. It also contained an in terrorem provision that excluded any beneficiary from the estate if they contested the will. One of the beneficiaries […] filed a caveat with the Mercer County Surrogate’s Court six days after her mother’s death, protesting the grant of letters of administration or admitting the will to probate.”
An in terrorem provision, also known as a no contest provision, is a statement in the will that seeks to disinherit any beneficiary who challenges the validity of the will.
One example of such a provision may be: “Any beneficiary named in my will who contests the probate or validity of my Will or any of its provisions shall receive no benefit under my will and shall be treated as if that beneficiary predeceased me”.
The purpose of the provision is to discourage litigation and challenges to the will. While the pros and cons of including such a provision are debatable and should be specifically considered by the testator and not simply included as boilerplate, the effect of a valid in terrorem clause is severe — the total loss of one’s inheritance.
While New Jersey law recognizes the validity and importance of in terrorem provisions, the New Jersey Supreme Court has ruled that such provisions are unenforceable when the challenger has probable cause to contest the will. Haynes v. First Nat. State Bank of New Jersey, 432 A.2d 890, 904 (N.J. 1981). This ruling has been codified in N.J.S.A. 3B:3-47, which provides that “[a] provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable if probable cause exists for instituting proceedings”.
This makes sense. If the testator lacked capacity to make a will, or was acting under duress at the behest of a dangerous family member, then we would want an aggrieved party to be able to challenge that will and bring those facts to light. And if the aggrieved party turns out to be wrong, we don’t want them to lose an inheritance if there was good reason to bring the challenge in the first place. Remember that challenges must be brought quickly before all facts are known.
But just because all facts may not be known at the outset does not mean that a challenger can defeat the teeth of an in terrorem provision with mere speculation. In short, that was the problem the decedent’s daughter faced in Rost. She acted without any supporting evidence, and she continued to press several claims after she was informed that the will contained an in terrorem provision. The court found the decedent’s daughter did not present any evidence to support her challenge to the will at the March 27 hearing on the return date of the order to show cause.
Litigating in New Jersey Chancery Courts must be done with care and careful planning. Litigants must pay close attention to language in a governing document that seeks to disinherit them just for bringing the challenge.