LEGALLY
Speaking
Reducing the Chances of a Will or Trust Contest
By
Craig van Keulen
Craig C . van Keulen is a longtime Morgan Hill resident . He has practiced law in Morgan Hill for over thirty-two years and with his brother , Scott at van Keulen & van Keulen , a p . c ., provide over 60 years of experience in the areas of business and civil litigation , construction law , landlord tenant matters , complex and general estate planning , trust administration , trust litigation , land development , commercial real estate purchase and sale , business formation and representation .
When a client decides to reduce the inheritance of or completely disinherit someone from receiving anything from their estate , many times they also want the no-contest clause to prevent that person from contesting their will or trust . The law on no-contest clauses changed on January 1 , 2010 when several new probate code sections came into effect that substantially limited the enforceability of no-contest clauses in direct contests to only ones brought without probable cause . These changes applied to all trusts which become or became irrevocable after January 1 , 2001 . As a result , no-contest clauses need to be supported and supplemented by other actions to reduce the chances of a will or trust contest .
Below are my recommendations on how to reduce the chances of a will or trust contest :
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Provide some small bequest or gift to the person who they don ’ t want to contest the will or the trust so they will lose something under the no-contest clause if they contest the will or the trust without probable cause . If the person who you do not want to contest the will or trust is not going to receive any bequest under the will or trust , then the no-contest clause will have no cost or effect on the person . What is a sufficient bequest or gift in order for the no-contest clause to be effective depends on the situation . Generally , I start with the portion of the estate that the person would be entitled to receive if the decedent had died without a will or a trust and balance it against what the testator is willing for the person to receive , and what the testator believes will be sufficient to make the disinherited person not want to risk losing if they contest the will or the trust without probable cause .
Do not make any distributions out of the trust before the time period by which an action to contest the trust has passed . Nothing would be worse than to provide the funds to the beneficiary that they need in order to hire an attorney to contest the will or the trust . Also , if you have already distributed the funds to the person contesting the will or the trust , then it is generally unlikely that they will be able to return the funds when the no contest clause is enforced . You also may need the funds to help oppose a contest , or if the contest is successful you don ’ t want to have to try and get funds and distributions returned from other beneficiaries .
Have the testator tell or communicate to all the beneficiaries ( including the disinherited beneficiary ) prior to their death the distribution terms of his will or trust . My experience is that most contests occur when there is a surprise or unexpected distribution under the will or trust . If everyone knows what to expect , then there are no surprises .
In addition , under the new probate code sections , no contest clauses are also no longer triggered by and enforceable against beneficiaries who object or challenge the actions or decisions by the executor and successor trustees during their administration of the will or the trust . This eliminated the effectiveness of no-contest clauses in preventing challenges or objections during trust and will administrations . This makes it more important that successor trustees and executors have their actions approved or confirmed by the court because there is no longer a threat of disinheritance if a beneficiary challenges or objects to their actions or decisions .
If you would like to have your current estate planning documents reviewed , please contact our office and set-up an appointment .
Dear Reader ,
In each future article , van Keulen and van Keulen , a p . c ., will pose a trivia question about its firm and / or something of local interest . The person who first emails the correct answer to Toni @ vkvklaw . com will receive a $ 100 gift card from Maurizio ’ s in Morgan Hill . The winner will be announced in the next issue of Morgan Hill Today .
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What professional sports team did van Keulen & van Keulen represent ?
S U M M E R 2 0 1 3 M O R G A N H I L L T O D A Y
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