No-Contest Clause
A provision in a will or trust that penalizes a beneficiary who challenges the document in court. If the challenge fails, the beneficiary loses their inheritance. Also called an 'in terrorem' clause. Not enforceable in all states.
Legal Definition
A testamentary or trust provision that provides for the forfeiture of a beneficiary's interest if the beneficiary contests the validity of the instrument, enforceable in varying degrees depending on the jurisdiction's statutes.
Practical Example
Grandma's will includes a no-contest clause and leaves $1 million to each of her three children. If one child challenges the will and loses, that child forfeits their $1 million. This discourages frivolous challenges.