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New Rules in 2010 Concerning “No Contest” Clauses

Many wills and trusts include language to deter future disputes or contests over the provisions of the will or trust. These “no contest” clauses typically provide that if someone challenges the validity of a will or trust, they take nothing under the instrument.

As an example, suppose a parent has two daughters and creates a trust leaving her estate equally to her two children. Just before her death, she changes her trust to leave the bulk of her estate to the younger dauhter with whom she lives. If the trust contains a “no contest” clause, the daughter who wants to challenge the validity of the trust as amended, faces a court holding that her objection constitutes a “contest” and therefore, the objecting child takes nothing under the trust.

Beginning in 2010, Probate Code Sections 21300-21322 will be repealed. New Probate Code Section 21310(6) will define a “contest” as one that alleges the validity of an instrument based on either (1) forgery, (2) lack of capacity (3) fraud, duress, or undue influence (4) revocation or (5) disqualification of a beneficiary under Probate Code Sections 6112 or 21350 (care custodians, drafters, etc.)

Most significantly what will change is the new Probate Code Section 21311 which provides that a no contest clause shall only be enforced if brought without probable cause. The standard for what is probable cause is a low one, i.e. was there a liklihood that the amendment was made because of forgery, undue influence, etc.

The new law will affect any will or trust whenever executed that becomes irrevocable after 1/1/2001. So in the example above, the child whose portion was cut could challenge the trust amendment if she had probable cause to believe that the amendment was executed as a result of one of the 5 grounds listed above, such as information that the daughter with whom the parent was living wrote it and influenced her mother to sign it.

The applicability of “no contest” clauses is an area of trusts and estate law that requires experienced estate planning attorneys. If you would like one of our experienced lawyers at Law Office of Scott C. Soady, A Professional Corporation to review whether your trust contains an effective “no contest” provision, give us a call. We also handle litigation arising out of the applicability of a “no contest” clause as in the context of challenging a will or a trust.

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