Trial lawyers beware of the in terrorem trust clause: A nasty trap that can keep on springing.

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An “in terrorem” or “no-contest” clause in a trust instrument provides for the forfeiture or reduction of the equitable property interest of a beneficiary who contests the arrangement. In a recent New Hampshire case, Shelton, Tamposi v. Tamposi, Jr. & Tamposi (2010) [Hillsborough Probate], the Court at the conclusion of the litigation enforced such a clause as of the date the action had been brought with devastating consequences for the plaintiff. Here is the link to the decision: http://www.actec.org/Documents/cases/NH_Probate_Ct_Decision_Enforcing_No_Contest_Clause_8_18_10.pdf.

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Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, Civil Remedies Updates, Professional Malpractice Updates, Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles E. Rounds, Jr., Suffolk University Law School | Attorney Advertising

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Charles E. Rounds, Jr.
Suffolk University Law School

Professor of Law, Suffolk University Law School. Tenure granted: 1990. Author: Loring and... View Profile »


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