Creating a Will is often seen as the final opportunity to decide how your assets will be distributed after your death. However, New Zealand law places several limits on absolute testamentary freedom. Legislation such as the Family Protection Act 1955, Property (Relationships) Act 1976, and Law Reform (Testamentary Promises) Act 1949 can override the wishes of a Will-maker to ensure that close family members and dependants receive fair and reasonable provision.

Because of these statutory obligations, beneficiaries can sometimes challenge a Will successfully, leading to outcomes that differ from the Will-maker’s intentions. To counter this, some people choose to include ‘no-contest’ clauses—also known as in terrorem clauses—to discourage challenges and help preserve their desired distribution.

What Is a No-Contest Provision in a Will?

A no-contest clause seeks to penalise any beneficiary who disputes the Will. Typically, this penalty is the forfeiture of their inheritance. The purpose is to deter litigation that may reduce the value of the estate or undermine the Will-maker’s intentions.

However, these clauses are not absolute. If a beneficiary has a valid claim under New Zealand law—such as a child seeking proper maintenance under the Family Protection Act—the courts can still intervene despite the existence of a no-contest provision.

When Can a No-Contest Clause Fail?

No-contest provisions are legally treated as conditions attached to the gifts in a Will. Conditions may be invalid if they are:

• unlawful

• contrary to public policy

• uncertain in meaning

• inconsistent with other parts of the Will

• impossible to perform

A classic example is a Will leaving a home “in fee simple” (full ownership) on the condition it is never sold. Because this restricts essential ownership rights, the condition is invalid.

Strengthening a No-Contest Clause

To make these clauses more enforceable, Wills should include a gift-over clause—a provision stating what happens to a forfeited gift. This ensures the no-contest rule is more than an empty threat and reduces the risk of it being struck out for uncertainty.

The clause must be carefully drafted, and the Will must be consistent. Even then, if a beneficiary has a statutory right to seek further provision, the courts may override the condition.

What Happens If a No-Contest Clause Is Invalid?

The legal effect depends on whether the condition is:

• a condition precedent (the gift only takes effect if the condition is met), or

• a condition subsequent (the gift ends if the condition is breached).

No-contest clauses are conditions subsequent—meaning a beneficiary loses their gift if they challenge the Will. If such a clause is invalid, the gift typically stands.

Because the rules differ for real property vs personal property, legal interpretation is essential.

Why Legal Advice Matters

No-contest clauses can be powerful tools, but they are legally delicate. Poor drafting or misunderstanding of your obligations can result in the clause being disregarded and your estate being divided in a way you never intended.

For advice on protecting your estate and ensuring your Will reflects your wishes:

➡️ Learn about our Wills & Estates services: https://corelegal.co.nz/
➡️ Book a Fixed-Price Initial Consultation with Core Legal in Masterton or Wellington: https://corelegal.co.nz/

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Frequently Asked Questions (FAQ)

1. Are no-contest clauses enforceable in New Zealand?

Yes, but only if drafted correctly—and only to the extent they do not conflict with legal entitlements under NZ law.

2. Can a child challenge a Will even if a no-contest clause exists?

Yes. Children may still claim further provision under the Family Protection Act.

3. Does including a no-contest clause guarantee my Will won’t be challenged?

No. It can reduce the likelihood of a challenge, but cannot prevent legitimate claims.

4. What is a gift-over clause?

It states where a forfeited gift goes if a beneficiary contests the Will. It strengthens enforceability.

5. Should I use a no-contest clause in my Will?

It depends on your goals and family circumstances. A lawyer can advise whether it will be beneficial or risky in your situation.