California: Beneficiary’s Challenge of Debts Owed to Parents Violates No-Contest Clause

Despite recent legislation tightening the enforceability of no-contest clauses in California, the court in Cook v. Cook, 99 Cal. App. 3d 913, 2009 Cal. App. LEXIS 1595 (2009), held that a beneficiary’s pleading violated the no-contest clause in his parents’ trust when the pleading (which asserted that debts the beneficiary owed to his parents were unenforceable due to the statute of limitations) indirectly contested the validity of the trust and an amendment in an attempt to receive an increased share of the trust.

A writing by the grantors (construed by the court as an amendment as a matter of law) specifically directed that debts be deducted prior to trust distributions and listed the past loans to this beneficiary by the grantors.

Special thanks to Martin D. Begleiter (Professor of Law, Drake University) for providing this information.