One of the most commonly asked questions about estate planning in California is whether it is possible to prevent someone from contesting the validity of a will or trust. The short answer is: yes, it is possible – to a certain extent.
The No-Contest Clause in Estate Planning
Under California law, you have the right to add what is called a ‘no-contest’ clause to your will or trust in order to discourage your beneficiaries from contesting its validity. If a beneficiary still decides to challenge the legality or validity of your will or trust and loses, they risk losing their share of the assets, which they otherwise would have inherited.
There are two reasons why you might want to add a no-contest clause to your will or trust:
- First, the very reason for making a will or setting up a trust is to make sure your assets are managed, divided, and passed on to those you love and care about exactly as per your wishes. If anyone could challenge the validity of your will or trust for any reason, it defeats the very purpose of creating an estate plan in the first place.
- Secondly, if a disgruntled beneficiary decides to challenge the validity or your will or trust – despite knowing that they have no probable cause and do not have a chance of winning – it can cause unnecessary delays in administering your estate. As a result, other beneficiaries might have to wait for years – through no fault of their own – before they could inherit what is rightfully theirs.
Once a no-contest clause is added, your beneficiaries will be essentially left with two choices – accept the terms of your will or trust and inherit their share or contest your will or trust and risk losing their share. In most cases, a reasonable person would choose the first option over the second one, since it is the safer choice. That said, there are unreasonable people in the world that might still challenge a will or trust even with these provisions in place and the odds stacked against them.
What Kind of Legal Challenges Violate the No-Contest Clause?
Under California law, a no-contest clause comes into the picture under the following circumstances:
- If a beneficiary challenges your will or trust’s validity without having any probable cause
- If a beneficiary challenges the legality of a property transfer based on the grounds that the transferor was not the owner of the property in question at the time of the transfer
- If a beneficiary files a creditor’s claim against your trust for debts owed to them
In the aforementioned scenarios, the beneficiary who files the pleading with the court would lose their share of inheritance.
Exceptions to the No-Contest Clause
As is the case with any legal provision, there are exceptions to the no-contest clause as well. What it means is that a no-contest clause does not prohibit your beneficiaries from challenging your will or trust. If, despite knowing that they risk losing their share of assets, they still decide to contest your will or trust, they can do so.
Under the law, a beneficiary has the right to challenge your will or trust on the following grounds:
- Mental incapacitation
- Duress or undue influence
- Fraud or forgery
- Faulty or unlawful execution
It should be noted that even if a beneficiary loses their challenge, they might still be eligible to receive their share of the assets, if the court believes that they had probable cause to file the pleading.
This leads to the question – what exactly is probable cause when it comes to challenging a will or trust?
If – at the time of filing the challenge – a beneficiary has reasons to believe that they have a good chance of winning – based on the information available to them – it might be considered a meritorious claim by the court. In which case, they might be eligible to receive their inheritance even if they lose the challenge.
On the other hand, if the challenge is brought about based on frivolous reasons or if the information available to the beneficiary at the time of filing the challenge is unlikely to convince a reasonable person that they have a good chance of winning, it might trigger the no-contest clause. In which case, the beneficiary might be prohibited from receiving their share of the assets.
Need to Add a No-Contest Clause to Your Will or Trust? Let Us Help You!
If you need to create a will or trust or add a no-contest clause to an existing will or trust, the Southern California estate planning lawyers at Garmo & Garmo can help.
We can analyze your estate plan, determine whether someone could challenge it after your death, and add an appropriate no-contest clause that can prevent frivolous litigations to a great extent.
If you have any questions regarding the no-contest clause or if you need to create a new estate plan, call us today at 619-441-2500 or contact us online and schedule a free consultation with one of our attorneys.