Trustee Cannot Use “No Contest” as a Shield but Case Contains Warnings for Bequest Managers

David Spurlock’s inheritance included an option for the discounted purchase of real estate held by his father’s testamentary trust. David exercised the option only to find that Wyoming Trust Company (“Trustee”), had allowed the property to deteriorate badly, leaving him with tens of thousands of dollars in repair bills.

David filed a lawsuit to remove the Trustee and seeking other remedies as well. The Spurlock Trust contained a stiff no-contest clause, disinheriting any beneficiary attempting to “impair” its operation. Predictably, the Trustee asserted that David’s suit violated the clause. Despite the Trustee’s non-performance, the trial court ruled against David. He therefore lost his status as a beneficiary, his inheritance, and any right to sue the Trustee. (The court stated, in part, that “Mr. (David) Spurlock has not only generated costly and protracted litigation, [but] he has [also] attempted to impair the function and/or operation of the trust and its provisions.”)

David appealed the decision and, after months of litigation, “prevailed” at the Wyoming Supreme Court, which issued a very narrow ruling in his favor. The court did reinstate David’s status as a beneficiary but did little more than put him in the same position he was when he undertook the original lawsuit. The controversy was not over but just beginning again.

CCK COMMENT: This case provides sobering reminders to charitable bequest managers everywhere:

1. The first court to look carefully at this matter reached the counter-intuitive conclusion that a no-contest clause protects a nonperforming fiduciary. To right that wrong, the beneficiary had to seek relief at the state’s highest court. Defeating a no-contest clause is frequently an uphill, time-consuming, and expensive process.
2. The so-called “victory” at the high court was hollow. The last information available is that David is back at the trial court with the Trustee, certainly poorer due to the legal fees he expended and by no means assured of ultimate satisfaction.

The lesson for charities is that any active engagement in a bequest administration where a no-contest clause is involved requires careful advice from highly qualified counsel. Courts may enforce these provisions even when injustice results.

Case: Spurlock v. Wyoming Trust Company, 542 P.3d 1071 (Wyo. 2024)

(This blog was originally posted on our LinkedIn on July 9, 2025.)