What Are No-Contest Clauses?

[Music] Hi this is Stuart Albertan and we're gonna address an issue the issue of no contest clauses one more time we've addressed this several times in our videos in the past but we think it's an important issue to keep people aware of what the legislation is in California pertaining to no contest clauses so a no contest Clause is generally included in a trust well or both and many people are familiar with them they say that if you can test your parents wishes under the trustor will that you are to be treated as your disinherited the parent doesn't want you contesting their wishes what they intend to happen to their estate after they die so they include these no contest clauses generally speaking no contest clauses do not apply except in one of three circumstances the first circumstances if you challenge the terms of the trust based on undue influence lack of capacity duress fraud any of those type of doctrines and you do so without probable cause chances are that you're going to be disinherited under the trust this is the first way that the legislation allows the no conscious clause to be used against you but it does have a special caveat and that's the probable cause exception what that means is if you brought your trust contest based on undue influence lack of capacity fraud duress you brought that and you were reasonable in bringing that and other people standing outside of looking at what you were doing at the time you brought the contest as long as you look reasonable to the court there's a fairly good chance that the court will not hold the no contest clause against you but you got to keep in mind judges are people some judges they may hold a no contest clause against you where another judge under the same set of facts same set of circumstances would not hold the no contest clause against you so this is something you have to be careful of if you're going to file a trust contest under this first prong where you're trying to invalidate a trust document based on undue influence lack of capacity the fraud or duress there's also two other ways that the no-contest clause can be used against you the second way is if you file a creditors claim against your parents trust or estate and the no contest Clause says that if you file a creditors claim you're hereby disinherited so you do have to have the special language in the trust terms in the no contest clause before that would be used against you so you want to make sure you pay attention to that if you think you're gonna file a creditors claim against a trust or a will because you believe your mom or dad owed you money they promised they were gonna pay you and now you're gonna file a creditors claim you better take a look at the no contest Clause to make sure it doesn't say if you file a creditors claim against the trust or estate you're hereby disinherited please note that under this prong of the no contest clause there is no probable cause exception in other words if you follow the creditors claim you're done it doesn't matter how reasonable you were in bringing that creditors claim the third way you can get the no contest clause to disinherit you and we're seeing this one more and more is where you allege in some pleading with the court that your mom or dad didn't have the authority or control or ownership of property to actually transfer that property to their trust I'll give you an example let's say that there's a husband and wife and the wife is completely demented she has Alzheimer's she's still alive but she no longer has decision-making authority or testamentary capacity and dad decides to revoke all of their old trust which has all community property in it and create a new trust that he creates and he moves all of that property into the new trust which includes his one-half the community and his wife's one half of the community and he puts it all in a new trust and in that new trust he only gives all of those assets to one sibling if you're one of the siblings that's not getting you have to be careful or if you're getting something under that trust say a hundred or two hundred thousand dollars you want to seriously consider whether you want to file your petition saying that Dad not have the power or ownership or authority to transfer mom's 1/2 the community into his new trust you want to seriously consider that because once you've done it you've triggered the no-contest clause and under this prong you also do not have a probable cause exception meaning it doesn't matter how reasonable you were in filing you're pleading with the court challenging the transfer of the property to the trust saying that dad didn't own this property you're more than likely gonna have triggered that no contest clause and be disinherited but keep in mind these no contest clauses are real many lawyers think they don't apply anymore the truth is they don't apply under most circumstances but they do under the three circumstances I just described so you want to take a careful look at them make sure they don't turn around and bite you in the rear. 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