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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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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