Court permits one beneficiary to be punished for another’s beneficiary’s conduct

In Tunstall v. Wells, 50 Cal. Rptr. 3d 468 (Cal. Ct. App. 2006), the settlor created an inter vivos trust terminating on his death at which time three of his daughters would receive $50,000 each with the remainder divided among two other children.  The trust also contained a no-contest clause revoking the gifts to all three daughters should any one of them contest the validity of the trust.

The court held that the no-contest clause did not violate public policy even though it would operate to punish persons not challenging the trust.