Trusts are incredibly useful estate planning instruments (see Testamentary versus Inter Vivos Trusts blog). They can be drafted and administered in almost any way you want; they can even protect your heirs’ inheritance from creditors (see Spendthrift Clauses blog). Another useful way to ensure that your estate is administered in a particular way is to include a “no-contest” clause in your estate planning documents.
A no-contest clause is a “provision in an otherwise valid instrument that, if enforced, would penalize a beneficiary for filing a pleading in any court.” California Probate Code sections 21310-23315 govern these provisions and define a contest as a “pleading filed with the court by a beneficiary that would result in a penalty under a no-contest clause, if the no contest clause is enforced.” The Probate Code also defines a “direct” contest, which, if brought with probable cause (as defined by statute) does not violate the no-contest clause.
Direct contests allege the invalidity of a protected instrument or one or more of its terms based on forgery; lack of due execution; lack of capacity; menace, duress, fraud, or undue influence; revocation of a will by statute; and/or disqualification of a beneficiary by statute. However, it is important to note that a no-contest clause will only protect the instrument containing the no-contest clause and other instruments only if they were already in existence and expressly identified in the no-contest clause. Accordingly, it is important to consult an experienced estate planning attorney to ensure your estate is protected from contests.
If you are interested in learning more about estate planning and protecting the administration of your estate, contact the San Jose estate planning attorneys at Lonich Patton Erlich Policastri, LLP. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.