Residents of California should be aware of a new law that may affect their estate plans. If you are in the process of making a new will, living trust, or other estate planning document, or if you have an existing trust or other estate planning document that became irrevocable on or after January 1, 2001, you should contact an attorney to discuss the impact California’s revised no-contest laws may have on your estate plan.
With the passage of California Senate Bill 1264, no-contest provisions in California wills, trusts, and other protected instruments as defined in the statute, are not enforceable unless they comply with the new law. The new California law, set forth in California Probate Code Sections 21310-21315, is effective as of January 1, 2010 and repeals California Probate Code Sections 21300-21322.
Pursuant to California Probate Code Section 21311, a no-contest clause shall only be enforced against three types of contests: 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; 3. The filing of a creditor’s claim or prosecution of an action based on it. With regard to property ownership disputes and creditor claims, a no contest clause shall only be enforced if the no contest clause expressly provides for that application. Note, common law also governs the enforcement of no contest clauses in California to the extent the statutes do not apply.
Under California Probate Code Section 21310, a direct contest is one that alleges the invalidity of a protected instrument or one or more of its terms, based on one or more of the following grounds: 1. Forgery. 2. Lack of due execution. 3. Lack of capacity. 4. Menace, duress, fraud or undue influence. 5. Revocation 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. 6. Disqualification of a beneficiary under Section 6112 or 21350.
A no-contest clause is of particular importance in your estate plan if you are attempting to disinherit a spouse, child or other heir. The enforceability of a no-contest clause in your estate plan can also affect the legal fees and expenses your estate may have to pay if a will contest or estate litigation is brought against your estate. California residents should consult a trust and estates attorney for more information about whether revisions to their estate plans are needed in light of California’s new law on no-contest provisions. Quicken Willmaker 2011 Edition: Book & Software Kit contains forms for making your own California will. More planning books for California residents are available at CA Estate Planning Books.
contains forms for making your own California will. More planning books for California residents are available at