(b)\u00a0\u201cDirect contest\u201d means a contest that alleges the invalidity of a protected instrument or one or more of its terms, based on one or more of the following grounds:<\/p>\n
(5)\u00a0Revocation of a will pursuant to Section 6120, revocation of a trust pursuant to Section 15401, or revocation of an instrument other than a will or trust pursuant to the procedure for revocation that is provided by statute or by the instrument.<\/p>\n
(6)\u00a0Disqualification of a beneficiary under Section 6112, 21350, or 21380.<\/p>\n
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<\/p><\/blockquote>\n
<\/p>\n
How Did The Defense Of A Trust Amendment Implicate A No Contest Clause?<\/h2>\n The Key case involved three sisters, a family trust, and over $70 million.<\/p>\n
The 1999 version of the Trust split the trust equally between the three sisters.<\/p>\n
In 2007, the Trust was amended, and basically disinherited sister Key.\u00a0 Key went from being left one-third of $70 million to being left about $1 million.\u00a0 In the 2007 amendment sister Tyler received 65% of the business assets, and the third sister received about 35%.\u00a0 A $2.5 million debt was also forgiven to Tyler.<\/p>\n
Key Petitioned to Invalidate The Trust Amendment<\/h4>\n Sister Key sued to invalidate the Trust on the grounds of undue influence by Tyler.\u00a0 Key won.\u00a0 Key then filed a petition to enforce the no contest clause against Tyler for defending the invalid 2007 amendment. The California probate code denied the petition, but the appellate court reversed.<\/p>\n
Defending the Validity of The Trust Amendment Was A Direct Contest Of The Earlier Trust<\/h4>\n The California appellate court looked at the definition of \u201cdirect contest\u201d and reasoned that Tyler\u2019s defense of the 2007 amendment was a direct contest because Tyler was asserting that the original trust was invalidated by the 2007 amendment.\u00a0 Said another way, Tyler\u2019s defense if successful would have invalidated the earlier version of the trust, and was therefore a contest of the original trust, implicating the no contest clause in the earlier trust.<\/p>\n
The California appellate court expanded the traditional understanding of no contest clauses in California and stated:<\/p>\n
Tyler defended a\u00a0spurious\u00a0Trust amendment in court in an attempt to defeat the provisions of the original Trust. For purposes of enforcing the No Contest Clause, it does not matter that Tyler’s attempt to enforce the\u00a0spurious\u00a0amendment through judicial proceedings began with a petition filed by Key.<\/p><\/blockquote>\n
This decision adds another layer of uncertainty into inheritance litigation in California.\u00a0 Defending the validity of a Trust amendment can trigger a no contest clause and puts at risk any benefits under the prior version of the Trust under California law.<\/p>\n
<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
In Key v. Tyler, 34 Cal. App. 5th 505 (2019), a California appellate court held that a trustee\u2019s defense of an invalid trust amendment, if made without probable cause, can activate a no contest clause and result in disinheritance.\u00a0 This hurt, because the trust at issue was worth over $70 million. What is a no […]<\/p>\n","protected":false},"author":1,"featured_media":7531,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[413],"yoast_head":"\n
No Contest Clauses In California Expand To Defense of Invalid Trust<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n\t \n\t \n\t \n