Changes in California’s Estate Laws
Effective January 1, 2010 and applicable to all cases where the will or trust was executed after January 1, 2001, the California statutes governing No Contest Clauses have been repealed and re-written. For anyone considering challenging a will or trust that contains a No Contest Clause, it is of the utmost importance to understand the new laws pertaining to challenges and to seek the advice of legal counsel who is experienced in estate litigation.
No Contest Clause
Many estate documents contain a provision known as a No Contest Clause. This clause provides that, if any person challenges – or contests – the terms of the document, that person will be disinherited or otherwise removed as a beneficiary. These are serious consequences and should be carefully considered when deciding whether to proceed with estate litigation. Often, estate planners recommend providing for greatly reduced bequests to potential challengers to make sure they face the risk of a financial loss in the event of a contest.
Direct Contests vs. Indirect Contests
Prior to 2010, the Probate Code differentiated between direct contests and indirect contests. Direct contests are challenges to a will or trust based on forgery; lack of due execution; lack of capacity; menace, duress, fraud, or undue influence; revocation; and/or disqualification of a beneficiary in a fiduciary relationship to the testator/trustor. Indirect contests challenged the validity of a will or trust on grounds other than those provided by statute. In 2010, the legislature did away with indirect contests, and changed the standard for direct contests from “reasonable cause” to “probable cause.” In enacting the new laws, the Law Review Commission stated that “because forfeiture is such a harsh penalty, it is disfavored as a matter of policy. Accordingly, a no contest clause should be applied conservatively, so as not to extend the scope of application beyond what was intended.”
The Case of Probable Cause
The result is that a No Contest Clause will only be enforced against a “direct contest” that is brought without probable cause. Probable cause exists “if, at the time of filing 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.” (California Probate Code §21311(b)) In discussing the change in the standard from “reasonable” to “probable” cause, the Law Revision Commission stated that that, in order to avoid enforcement of a No Contest Clause, the contestant must not only have proof of his or her factual contentions but must also have a “legally sufficient ground for the requested relief.” There must be a “reasonable likelihood” that the requested relief will be granted, and that term has been interpreted to mean “more than merely possible, but less than ‘more probable than not.'”
Under Donkin v. Donkin (2013) 58 Cal.4th 412, 422 “[I]f a beneficiary contests or seeks to impair or invalidate the trust instrument or its provisions, the beneficiary will be disinherited and thus may not take the gift or devise provided under the instrument.”
This concept backfired in the case of Key v. Tyler (2019) 34 Cal.App.5th 505 where a dispute over the validity of an amendment to the trust caused the Court of Appeal to hold that the anti-SLAPP statute applies to No Contest Clauses and defense of an amendment to a trust can constitute a direct contest for purposes of a No Contest Clause. All actions to enforce No Contest provisions arise from protected petitioning conduct.
They may also be enforced in the event of a challenge against a transfer of property on the grounds that it was not the transferor’s property at the time of transfer, or a contest against the filing of a creditor’s claim. (Cal. Probate C. §21311)
Additional & Substantial Appeal
The other substantial change resulting from the new laws is the repeal of Probate Code §21320, which had allowed parties to request an advance ruling from the court to determine whether or not the no contest cause will be triggered by a proposed pleading.
Best California Estate Litigation Attorneys
If you are concerned that your loved one’s will or trust was a forgery, was subsequently revoked, was the result of fraud, duress, undue influence, or is otherwise invalid, it is imperative that you seek competent legal counsel to avoid unwittingly triggering a No Contest Clause. The Boesch Law Group regularly handles estate litigation involving No Contest Clauses and can advise you of your options. Please contact one of our Los Angeles-based estate, trust, & probate attorneys today at (310) 578-7880.
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