A no-contest or in terrorem clause in a will or a trust typically makes the gifts in the instrument conditional on the beneficiary not challenging or disputing the validity of the instrument. The term in terrorem, as applied to wills, refers to a gift given on the condition that the beneficiary will not dispute the validity or disposition of the will.

In terrorem clauses are designed to dissuade beneficiaries from filing vexatious litigation that might thwart the intent of the testator (person who made the will) or the grantor or settlor (person who created the trust).

In terrorem clauses allow the intent of the testator to be given full effect and avoid vexatious litigation—often among members of the same family. If the intention of a suit is to thwart the settlor's intention, the in terrorem clause should be enforced. Laws vary from state to state but a violation of the in terrorem clause will usually be found only when the acts of the parties clearly fall within its express terms. Thus, many courts narrowly construe in terrorem clauses to avoid forfeiture, while also fulfilling the settlor's intent.

And some courts have held that filing suit to determine a testator's intent, or to ascertain a beneficiary's interest under a will, is not a suit intended to dispute the validity of the will. A suit brought in good faith and upon probable cause, to ascertain the real purpose and intention of the testator and to then enforce such purpose and intention, is not an effort to vary the purpose and intention of the will.

These courts reason that a motion to contest a will is, like any other motion, merely a pleading that is the necessary vehicle by which the movant raises issues for resolution. A motion is not self-proving. If the mere filing of a motion to contest a will is a contest of the will, this would be inconsistent with the legal significance of a motion.

In states whose courts follow this reasoning, unless some further action is taken to thwart the intention of the testator, the mere filing of a contest motion is insufficient to cause a forfeiture under an in terrorem clause.

In Texas, an in terrorem or no-contest clause in a will or trust is generally enforceable. Such clauses are intended to prevent beneficiaries from challenging the validity of the document, thereby upholding the wishes of the testator or settlor. Texas law recognizes the validity of these clauses and enforces them to discourage frivolous litigation that could undermine the testator's or settlor's intentions. However, Texas courts also acknowledge that there are circumstances under which a beneficiary may have a good faith and probable cause to challenge a will or trust. In such cases, if the challenge is made in good faith and with probable cause, it may not trigger the in terrorem clause. This means that a beneficiary who genuinely believes there is an issue with the will or trust and has a legitimate legal basis for the challenge may not necessarily forfeit their interest under the in terrorem clause. The courts aim to balance the enforcement of the settlor's intent with the rights of beneficiaries to seek clarification or contest the document when there are valid concerns.