In terrorem is a legal term coming from the Latin for 'into/about fear'. It refers to a legal threat, generally one that is used to coerce someone into action without actually having to take them to court. It may refer to open threats -- such as cease and desist letters -- or more subtle threats, such as general environment in which lawsuits are common.
Wills may have something called an in terrorem clause, stating that if the will is contested the beneficiaries get a reduced share, or perhaps no share at all.