TWO THINGS WE ALL SHOULD KNOW
Forfeiture (In Terrorem) Clauses:By Cary A. Lind
Some wills contain an in terrorem clause, which states that if any legatee contests the validity or terms of the will, then his or her share will either be forfeited or the contesting legatee will be given some dramatically lower amount instead. (This article addresses wills and legatees, but the same clause may also appear in trusts and will apply to trust beneficiaries.) The clause is generally valid, but there are a number of observations to be made:
- Forfeiture clauses are “disfavored and are strictly construed to avoid forfeiture.” If there is any possibility of construing the clause in favor of the beneficiary, it will be done. The court may also uphold one part of a clause and invalidate another.
- The court will not enforce the clause if the effect is contrary to the laws or public policy of the State of Illinois. For example, a clause that encourages a legatee to divorce has been held to be against public policy. Similarly, in Estate of Mank (1998), the guardian of a disabled person was encouraged by the judge hearing the guardianship to file a “pro forma” will contest in order to avoid the running of the statute of limitations for filing the contest and to preserve the possible rights of the ward in a decedent’s estate. After some investigation and without a great deal of time or expense on the part of either party, the contest was dismissed by the guardian. The Appellate Court held that the contest was de minimis and that it was against public policy to enforce an in terrorem clause against a disabled adult ward under the facts of the case, and the court refused to uphold the forfeiture.
- A number of years ago I heard an attorney suggest that one way to prevent a successful will contest was to have the decedent execute wills on a yearly or other frequent basis. The idea was to put in front of the contestant a series of barriers rather than only one. In a worst case for the estate, the result could be a series of will contests carried on for years as each prior will is challenged. Presumably, the contestant will opt not to even begin such a tortuous route. Please note, however, that with any successful challenge, there will be a further issue of whether the prior will is or is not revived (see below).
Revival of Prior Will (or not).
A testator executed a will in 1997, executed another will in 1999, and died in 2000. A will contest is brought seeking to invalidate the 1999 will, and that contest is successful. Does the estate then pass by intestacy, or does it pass under the 1997 will? Put another way, when the later will is invalidated, is the earlier will revived?
The answer to this question begins with the Probate Act. § 4-7(c) of the Act states: (c) A will which is totally revoked in any manner is not revived other than by its re-execution or by an instrument declaring the revival and signed and attested in the manner prescribed by this Article for the signing and attestation of a will. . . . .
In order to revive a prior will, it will first be necessary to prove both the execution of and contents of the prior will. Assuming that is done and considering the statute, does the purported execution of the later will actually “revoke” the earlier will? The answer to the question may not be at all clear, and since the enactment of §4-7(c), there is no case law on the issue. If the decedent was incompetent at the time the 1999 will was executed, then the decedent never actually “revoked” the 1997 will. If the 1999 will was not executed with the requisite formalities, it would also not revoke the earlier will. However, if the later will was the result of undue influence, the decedent may actually have intended to revoke the 1997 will but not intended to put into the 1999 will all of the provisions that it contained. A factual determination should be required by the Probate court in each case to determine whether the earlier will is or is not revived.
The issue of revival is also important for purpose of giving notice of the will contest. Legatees under the prior will may have to be given notice or named as parties along with all heirs at law. Obviously, the parties in interest will ultimately be either the the legatees under the prior will or heirs, but not both.
Finally, in light of the uncertainty as to revival (or not) of prior wills, will the above strategy of executing frequent wills work? Maybe not, since the ultimate recipients of the estate may turn out to be the decedent’s heirs instead of the legatees under an earlier will.
© 2002 by Cary A. Lind, all rights reserved