No contest clauses generally are not enforceable against beneficiaries of California trusts when there is “probable cause” to challenge the trust instrument.
Yet the probable cause safe harbor may disappear if the contest is untimely. That’s the upshot of Meiri v. Shamtoubi (2022) 81 Cal.App.5th 606, a Court of Appeal opinion issued last week.
Tracy M. Potts has nearly three decades of experience in California with estate planning, administration and litigation. A Texas native, she earned her law degree from Southern Methodist University School of Law. Her leadership experience includes chairing the Executive Committee of the State Bar of California, Trusts and Estates Section, as well as the Sacramento County Bar Association, Probate and Estate Planning Section. She is a certified specialist in estate planning, trust, and probate by the State Bar of California, Board of Legal Specialization. She also is a fellow of the The American College of Trust and Estate Counsel.
Tracy’s law firm, Legacy Law Group, operates from the Natomas area of Sacramento. I sat down with Tracy at her office in February 2020 to discuss estate planning and dispute avoidance.
No contest clauses are included in wills and trusts to discourage dissatisfied beneficiaries from challenging the document’s validity. Because enforcement of these clauses results in disinheritance, the California Probate Code limits their applicability. But what happens when a beneficiary defends a trust amendment that is found to be invalid? Can the defense of an
No contest clauses are an ever-evolving area of the probate law in California. The Court of Appeal further refined the rules governing no contest clauses in a decision issued last week, Aviles v. Swearingen (2017) 16 Cal.App.5th 485. In brief, in order for a no contest clause to apply to a trust amendment, the no contest clause must be stated in the amendment or the amendment must expressly reference the no contest clause set forth in a prior document.
The takeaway from the case for estate planners is that if your client wants a no contest clause, then you must mention the no contest clause in every trust amendment that you draft for the client. It is not good enough to simply include a no contest clause in the client’s trust and then refer back to that trust, generally, in later amendments. Each subsequent amendment must either contain its own no contest clause or must expressly reference the no contest clause of the original trust instrument.