No Contest Clauses: Still a Threat

In terrorem or “no contest” clauses in wills and trusts disinherit challengers. They are increasingly disfavored. It is also true that many states have, whether by statute or decision, protected those movants raising issues that have “probable cause” of success from the severe consequences of these provisions. Even so, the clauses still have teeth and charities should be wary of raising issues in an estate where a no-contest condition is in place. The provisions can be triggered in surprising ways.

Meiri v. Shamtoubi, 297 Cal. Rptr. 3d 397 (Cal. App. 2022) is an unusual no-contest case. California law permits “probable cause” challenges. Here, the plaintiff made a credible challenge to a no-contest trust, but well after the filing deadline. The court not only rejected the challenge as untimely but also stripped Meiri of her inheritance. The court reasoned that since a time-barred filing will likely be rejected, it cannot, by definition, have “probable cause” for success. Meiri triggered the full consequences of the no-contest clause by filing her tardy challenge.

Slosberg v. Giller, 876 S.E.2d 228 (Ga. 2022) raises the question of when the “probable cause” of a challenge is determined. One would think the assessment is made at the time of filing (as is the case with a warrant needing “probable cause” for issuance). But, Slosberg points in a different direction. The decision states that if the entire trust is deemed invalid, the no-contest clause ceases to have legal effect. However, the court preserved the possibility that a reasonable but ultimately unsuccessful challenge to a trust would subject the movant to disinheritance. The chilling effect of that outcome effectively negates the limited Georgia “probable cause” safe harbor.

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(This article was originally published on LinkedIn on August 25, 2023)