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This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.

November, 2008       2010 Update.  (in 2008??)

At the urging of the California Bar Association, the State of California has removed all No Contest Clauses, effective 1/1/2010.  While this sounds like a self-serving step by the Bar Association to encourage litigation, we must look deeper at our present legal system. 

Let’s assume I have 2 wonderful daughters (true) and a rotten son (mythical).  I leave everything to my daughters equally and nothing to Sonny.  My Will and Trust have a No Contest Clause.  They say that if anyone challenges my Will / Trust he gets nothing. 

Sonny is furious.  He claims the girls coerced / manipulated / cheated / I was goofy…  He goes to his lawyer.  The lawyer explains that if Sonny sues and loses, he gets nothing.  Sonny yells that he is already getting nothing, so why not sue??? 

In this example, the No Contest Clause is supposed to scare Sonny, but to be effective, Sonny must be given a bequest in the Trust; big enough to scare him of the risk of losing it. 

If I had left Sonny $100,000, maybe he would pause and re-consider.  The bequest must be enough that he would shut up and accept it, rather than risk losing it. 

Sonny’s lawyer goes on to explain that TODAY the law allows a ‘probe.’ 

We can Petition the Probate Court Judge.  We prepare lawsuit papers claiming Sonny was cheated but we do NOT file them.  Instead, we file a probe: a Petition that the Judge review our tentative un-filed papers and tell us now before we file, whether filing those papers would cause Sonny to forfeit the $100,000.  Of course, the girls’ lawyers tell the Judge that Sonny’s share is forfeited already.   

The Judge rules that if Sonny actually files the papers his inheritance is / is not forfeited.
Then the loser has the right to appeal. 

The 1^st probe might entail $20,000 in legal expenses, per side.  The Appeal might cost the same.  And this was all for a probe: preliminary ruling over papers still not filed or even heard.  [They are fighting over the technical application of the No Contest Clause.  They have not even said 1 word in Court about the crazy guy who signed the Will.]

The Bar Association realized that this probe method of allowing fights over preliminary issues was causing more litigation than it prevented, so instead of changing the system (outlawing the ‘probe’) they decided to eliminate the No Contest Clause for people who die after 12/31/2009.

So, if I die after 2009, Sonny has a chance to be heard in Court, claiming that I was crazy, without risking his inheritance.  I do not like this, but the California Legislature and Guv did.

What that means is the clause is automatically excised from your documents (unless you die soon).  There is nothing to do to existing documents.  It just happens.  Live with it.  (And die with it).

Exception:  If you have disinherited a child, perhaps we should make sure you have not given a gift (like Sonny’s $100,000 above) only to find it was not helpful or appropriate.

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