We may enjoy watching courtroom drama in movies, TV and on stage, but when it comes to our own lives, most people will do just about anything to avoid an estate battle. Including a “No Contest” provision in a will or living trust is an attempt to preclude challenges to a person’s wishes, and to give anyone who might be thinking about a trust or estate battle a clear warning against doing so, according to the article “Why courts enforce a ‘No Contest’ clause” from The Daily Sentinel.
The simple answer to the question of “why would a court enforce a No-Contest clause” is pretty straightforward. If that’s what you put in the will or trust, that’s what the court wants to have happen.
The fundamental message in a No-Contest clause is that anyone who attempts to contest or oppose the document will give up their share, lose any right or interest to the trust or estate, and will be treated as if they have died before the person who is signing the will or trust.
You can have a will or trust created without a No-Contest clause, but if you want to make it very clear how you feel about anyone challenging your wishes, including a No-Contest clause is a good way to do it.
That said, No-Contest clauses in California are limited in their applicability due to legislation that took effect in 2010.
Under this relatively new California law, No-Contest clauses are only enforced against certain types of contests against protected instruments (documents expressly including the No-Contest clause or documents in existence on the date the document including the No-Contest is signed and that are expressly identified in the No-Contest clause) that became irrevocable after January 1, 2001. According to California Probate Code Section 21311, only the following types of contests will be enforced:
A direct contest alleging the invalidity of a protected instrument (due to forgery; lack of due execution; lack of capacity, menace, fraud or undue influence; or revocation of a will or trust) brought without probable cause. Note: To have probable cause requires that the contesting beneficiary know of facts that would cause a reasonable person to believe his or her challenge will be grated by the court. Also note, challenging the actions of a trustee for how they manage the trust is not a direct contest.
A pleading to challenge the transfer of property on the grounds that it was not the transferor’s property at the time of transfer (but only if the No-Contest clause expressly provides for this application). Note: There is no mention of a need for lack of probable cause here. That means simply filing the pleading and alleging these grounds triggers the No-Contest Clause even if good cause exists.
The filing of a creditor’s claim or prosecution of a legal action based on a creditor’s claim. Meaning, if you file a creditor’s claim alleging the decedent owed you money or property during their lifetime under a contract theory, you trigger the No-Contest clause. Like number 2 above, there is no requirement that the claim lack probable cause. If you simply file a creditor’s claim or take action to prosecute a creditor’s claim against a person who died, be prepared to face the No-Contest clause.
As a practical matter, in order to dissuade someone from challenging a will or trust and triggering a No-Contest clause, they must actually have something to lose under the will or trust to begin with. Meaning, someone who was disinherited entirely has nothing to lose, other than the attorney fees required to bring the contest (which may be significant and is still a considerable factor, especially if the contestant is unlikely to prevail).
Reference: The Daily Sentinel (August 24, 2019) “Why courts enforce a ‘No Contest’ clause”
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