Can You Contest a Trust with a No-Contest Clause?
If you are a beneficiary to a trust and you wish to bring a legal challenge regarding the trust, you may be inclined to swiftly back off if you learn the trust has a “no-contest” clause.
Such a clause provides for the disinheritance of any beneficiaries who opt to contest the trust and, understandably so, serves to frighten many beneficiaries into choosing to protect their right to inheritance over questioning an aspect of the trust. However, ever-changing California laws and court decisions have repeatedly changed the way courts interpret and apply no-contest clauses and, in most situations, a beneficiary who brings a contest before the court no longer risks disinheritance. In fact, disinheritance due to a no-contest clause is becoming less and less likely in recent years.
Updates to the California statute regarding no-contest clauses and new court decisions have rendered no-contest clauses largely unenforceable. Determining that disinheritance was an excessively harsh punishment for questioning part of a trust, legislators and judges have increasingly reduced the power of the no-contest clause. Currently, under California law, a no-contest clause can generally only be enforced if you bring a direct contest without having probable cause to do so.
A “direct contest” attacks the trust document itself on one or more of the following grounds:
- Lack of mental capacity;
- Lack of proper execution;
- Forgery; or
- Fraud, duress, undue influence, or menace.
However, a beneficiary can still safely bring one of the above direct contests as long as they have probable cause to do so.
The next question is often: What does “probable cause” mean?
There is not a single, straightforward answer because what constitutes probable cause will vary from case to case. Under the law, probable cause exists when, “at the time of filing of a contest, the facts known to the contestant would cause a reasonable person to believe that there is a reasonable likelihood that the requested relief will be granted after an opportunity for further investigation or discovery.” This is largely up to the judge’s discretion, however, this is a much lower standard than it once was considered in California, which now benefits beneficiaries.
In short, in most cases, a beneficiary will not risk disinheritance for bringing a trust contest. Even a bad trustee who breaches his duties to the beneficiaries is difficult to disinherit. However, to be certain, you should always discuss a possible trust contest with a qualified California trust attorney.
Discuss your situation with an experienced San Diego estate planning attorney today.
Understanding the specific language of trust a document and conditions as well as the legal implications of the trust provisions can be complicated and confusing. If you are concerned about the validity of a trust provision or any actions involving trust administration, you should not hesitate to consult with a skilled trust and estates lawyer who understands all of the relevant California laws and how they can be applied to your case. Please call estate planning and litigation attorney Byron K. Husted at 619-826-8060 for help today.
