No Contest Clauses are provisions in trusts that calls for a beneficiary who challenges in court the terms of a trust or will to be disinherited from the estate. The fear of losing one’s inheritance in its entirety can deter vexatious litigants from filing frivolous lawsuits. Just as the no contest clause can be used for good, it is often used by undeserving beneficiaries and unscrupulous trustees and executors to prevent rightful beneficiaries from filing good faith lawsuits to protect their inheritance rights.
If a trustee or executor is threatening to disinherit a beneficiary of an estate, the beneficiary should immediately seek out legal counsel. Likewise, an attorney should be consulted if a beneficiary believes that deceased person created a will or a trust that was not a product of their free will or if they were subject to undue influence or financial elder abuse. Unfortunately, beneficiaries are often too afraid to even seek out legal counsel for fear of being disinherited. Fear not! Seeking out an attorney to provide legal advice in itself won’t get a beneficiary disinherited.
Here is what you should know about a No Contest Clause:
What is a No Contest Clause?
A no contest clause is a provision placed in a will or trust to protect the wishes of the deceased. In an event where an heir is nearly disinherited or unhappy with the results of the will, a no contest clause will give the person a reason to avoid contesting the will. A no contest clause states that in a situation where one contests the will and loses, the beneficiary will gain nothing from the will instead of what was originally left to them. With the chance of gaining nothing at the end but costly legal fees, the chance for litigation is minimized. However, this is only a deterrent if the one contesting has a sizeable inheritance to lose. In a case where the member of the family was completely disinherited and left out of the will, they would have nothing to lose by pursuing litigation.
California No Contest Clause Laws
Current California law makes no contest laws disfavored and has recently been made even more difficult to enforce. Probate Code section 21311 explains 3 situations where a no contest clause may be enforced.
(1) A direct contest that is brought without probable cause.
(2) A pleading to challenge a transfer of property on the grounds that it was not the transferor’s property at the time of the transfer. A no contest clause shall only be enforced under this paragraph if the no contest clause expressly provides for that application.
(3) The filing of a creditor’s claim or prosecution of an action based on it. A no contest clause shall only be enforced under this paragraph if the no contest clause expressly provides for that application.
Where there is probable cause that the estate plan was a product of fraud or undue influence, even if the litigant beneficiary loses at trial, they do not lose their inheritance rights.
If after litigation the contestant wins, or the case is settled before trial, the no contest clause is now considered invalid and will never be enforced.
If you have reason to believe a will or trust was the product of fraud or undue influence, , it is best to speak with an attorney about your options. Abbas Gokal and our team of expert attorneys will help you prepare for any situation and are there to help you seek out your best options. Give us a call at 949-753-9100 or contact us here.