1-7-2026 NC Court of Appeals Decision "In re: Russo": (1) No Contest Clauses are Still Impotent, and (2) Corporate Law Firms Cannot Be Fiduciaries, Only Individual Lawyers.

The North Carolina Court of Appeals issued a unanimous decision on January 7, 2026, in the case In re: Russo (opinion here). This ruling focuses on two important issues in estate law: (1) the limited power of "in terrorum" or no contest clauses in wills, and (2) the legal distinction between individual lawyers and law firms serving as fiduciaries under North Carolina law.

The first major point the court makes is that no contest clauses, also known as "in terrorum" clauses (provisions in wills designed to discourage beneficiaries from challenging the will by threatening to disinherit anyone who contests it) is that such clauses generally have limited power in North Carolina. The court emphasized that no contest clauses cannot be used to intimidate or automatically disinherit a beneficiary who brings a reasonable challenge to a will.

The second major point in In re: Russo concerns who can serve as a fiduciary in North Carolina estates. The court clarified the distinction between individual lawyers and law firms acting as fiduciaries, focusing on the interpretation of North Carolina General Statute § 53-303(a). NCGS 53-303(a) restricts which entities may serve as fiduciaries. It allows individuals, including lawyers, to act as fiduciaries but limits the ability of corporate entities, such as law firms, from serving in this role unless specifically authorized and itemized in 53-303(a). Law firms are not so authorized.

Takeaways:

• Do not name law firms as fiduciaries: Always specify an individual lawyer to serve in fiduciary roles.

• Understand and stop using no contest clauses, or use them more responsibly: No Contest clauses are generally only enforceable if the beneficiary contested the will without "good faith" or "probable cause" - low bars I've never seen a plaintiff trip over. In my opinion these clauses should be not used unless they clearly state the good faith/probable cause bar.

• A better solution is drafting dispute resolution terms into documents.