It is a rare day that the Court of Appeals, New York’s highest Court, deals with trust and estate matters, let alone something as granular as the validity of an in terrorem clause.  But speaketh they did, on April 17, 2025, in a lengthy opinion with a 13-page dissent to boot (Carlson v. Colangelo, 2025 NY Slip Op 02264). 

In this case, the Decedent never married but he was survived by a romantic partner, Kristine M. Carlson (“Carlson”), and by his daughter Crissy Colangelo (“Colangelo”), whose mother was a prior romantic partner of the Decedent.  The Decedent executed a pour-over Will and Revocable Trust the month before he died.  Under the Trust, the Decedent left his residence in Cortlandt Manor, New York to Carlson and his “interest” in an LLC which owned real estate to Colangelo with a statement that “it is Grantor’s sincere wish and desire that Crissy Colangelo provide a stream of income, not to exceed the sum of $350,000 in total, to Kristine M. Carlson.”  The Decedent named Colangelo as Trustee.

Both instruments contained in terrorem clauses.  The Trust clause provided:

In the event that any heir, distributee, beneficiary…shall contest any aspect of this Trust, or the distribution of the Grantor’s assets pursuant to his Last Will, inter vivos Trust agreement, beneficiary designations or non-probate beneficiary designations, or shall attempt to set aside, nullify, contest or void the distributions thereof in any way …

then the challenger would forfeit benefits under the instrument. 

After a number of failed attempts to resolve issues between them, Carlson commenced an action in Supreme Court seeking to compel Colangelo to distribute the residence to her, a declaration that Carlson was a pre-mortem 50% owner of the LLC, a direction that Carlson is entitled to the $350,000 income stream from the LLC, an accounting for the LLC, and punitive damages. Continue Reading Lengthy Opinion Delivered Regarding In Terrorem Clause