How can a Connecticut resident protect his or her estate from family members who might fight over it? The inclusion of a “no contest” clause under a will or trust may be one strategy, but does Connecticut recognize “no contest” clauses? And, if an heir initiates a litigation, would a Connecticut probate court actually enforce a no contest clause?

What is a No Contest Clause?

A “no contest” clause, also known as a “forfeiture” or “in terrorem” clause, directs that a beneficiary forfeits an interest under a will or trust if the beneficiary takes certain actions in violation of the clause — most commonly, by contesting the validity of the
will or trust. In Connecticut, few legal cases address the enforceability of no contest
clauses, which makes any legal opinion on this topic a potentially valuable datapoint
for estate planners and their clients.

In addition to fending off “will contests” (that is, a fight over the validity of a will), a
“no contest” clause also could be drafted to dissuade an heir from challenging a specific action by an executor or trustee. It is this less common situation that recently
was considered by the Connecticut Appellate Court, and which may illustrate more broadly how a Connecticut court will respond when presented with a potential disinheritance under a no contest clause.

Guidance From a Connecticut Appellate Court: A Recent Case

In a previous update, we outlined a Connecticut Superior Court holding that provided
a rare datapoint for practitioners. In Salce v. Cardello, No. CV176070740S, 2019 WL
6247662 (Conn. Super. Ct. Nov 6, 2019), the Superior Court in New Haven reaffirmed Connecticut Supreme Court precedent in holding that there was no violation of an in terrorem clause. The facts in Salce were unusual, including (1) an in terrorem clause that forbade any objections to actions taken by the fiduciary (who also was the drafting attorney) and (2) a beneficiary who did not contest the will but merely identified mistakes by the Executor/Trustee in preparing the estate tax return. The Superior Court noted several rules of construction and application when deciding whether to enforce an in terrorem clause, namely:

• a common expectation among Connecticut planners is that in terrorem clauses are disfavored and construed strictly to prevent forfeitures;
• an exception to enforcement where a contest is initiated in good faith and is supported by probable cause and reasonable justification; and
• the Court’s review is not limited to the plain language of the clause, even if the triggering language is expansive and would sweep in any challenge, no matter how
• modest in scope or tangentially related.

Since our previous update outlining Superior Court’s decision in Salce, that same case went before the Connecticut Appellate Court in Salce v. Cardello, (210 Conn. App. 66 2022). While the Superior Court’s analysis was based on a finding of good faith and
probable cause, the Appellate Court did not reach those grounds. Rather, the Appellate Court held that it would not enforce the in terrorem clause in this case as a matter of
public policy, even though it found that the beneficiary had technically violated the expansive terms of the clause as written. The Appellate Court did not reach the issue of “good faith.” The Court explained:

• In terrorem clauses are invalid if they violate public policy.
• On these facts, where a beneficiary sought to correct errors by the fiduciary, any technical violation of the in terrorem clause would not be recognized.
• Although oversight of the fiduciary in this case did trigger the broad language of the clause, some types of oversight must be allowed because “making sure that a fiduciary does the ministerial parts of his job correctly” is an “important interest” that should not be punished, and it would violate public policy to do so.
• The Court did not reach a good faith analysis: no “good faith” analysis is required if enforcement of the in terrorem clause would violate public policy.

However, in dicta, the Court suggested that in terrorem clauses could be effective in shielding a fiduciary from oversight by the beneficiaries, writing:

• “As a general rule, in terrorem clauses are valid in Connecticut.”
• “We recognize that a testatrix or settlor may have a keen interest in protecting her designated fiduciary from attacks on the fiduciary’s good faith exercise of judgment, such as how to invest the assets of the trust or at what price to sell assets of an estate. Under most circumstances, an in terrorem clause that has the effect of limiting challenges to such good faith exercises of judgment would not violate public policy.”

The Court acknowledged a “good faith” exception in the specific situation of will contests, but it explicitly “d[id] not reach the question of whether a good faith exception applies in this case,” having already bounced the claim on public policy grounds. It therefore left open the possibility that “good faith” could still be raised as a second-level defense, where enforcement is not found to violate public policy.

This case is notable in several regards. First, the attempted enforcement of the in
terrorem clause did not relate to the unusual case of a will contest, but rather to the more unusual situation of estate and trust administration. Second, the Court found that
a claim to oversee the actions of the fiduciary did actually trigger the in terrorem clause. This finding raises the specter of unintended consequences: other Connecticut courts have been very careful to construe in terrorem clauses narrowly to find that they had not been triggered. Finally, although this claim was not successful, and the Court
arguably reached the correct result, the Court opened the door to greater litigation
over in terrorem clauses, making the expansive statement in dicta that “[u]nder most circumstances,” if there is a challenge to the fiduciary’s exercises of judgment, the application of an in terrorem clause “would not violate public policy.” This seemingly would chill a meaningful review of a fiduciary’s actions.

Planning Considerations

The text and holding of the Appellate Court decision in Salce likely will reaffirm the
belief of most estate planning attorneys in Connecticut that in terrorem clauses are not
a surefire solution, and that clients and planners should continue to proceed carefully in drafting documents to dissuade or disinherit problematic heirs. Salce also provides lessons for the beneficiary considering a claim or objection to actions taken by a fiduciary: given the broad language of the case, a beneficiary should tread carefully when challenging a fiduciary’s actions.