no contest or in terrorem clauses in texas

In Terrorem Clauses

There are many no contest clauses in wills in Texas. These no contest clauses are also referred to as in terrorem (latin for in or about fear) clauses or forfeiture clauses. These basically say that anyone who contest the will looses their inheritance under the will.

Texas Courts

Texas Courts don’t like to enforce these forfeiture clauses if there is a reasonable way to avoid enforcement. Many courts created a good faith exception. If a contest was brought in good faith, there was no forfeiture. Creative lawyers started drafting in terrorem clauses in wills to get around the good faith exception.  They added new provisions to the in terrorem clause.  These provisions dictated that the contestant forfeited his inheritance under the will even if the contest was brought in good faith and with probable cause. Although courts found ways to avoid forfeiture, some of these provisions have been upheld in some cases even if the contest was brought in good faith. I have written about no contest clauses and Texas wills here.

New Texas Law

The Texas legislature recently passed a bill that addresses in terrorem clauses and the good faith issue. The new law voids in terrorem clauses in wills and trust if a contest of the will or trust was brought in good faith even if the will says otherwise. So, even if the will provides for a forfeiture in the event of a will contest even one brought in good faith, the new legislation voids those provisions if the contest was brought in good faith.