Reported / Citable
Background
After Ronald Nelson Jr. died, his father challenged a family trust that left him a cash gift. He later dismissed that challenge after resolving separate litigation over life-insurance proceeds. The decedent’s widow then sought a ruling that the father’s petition triggered the trust’s no-contest clause and forfeited his gift.
The probate court ruled for the father under the so-called paper-contest exception, an old doctrine suggesting that a contest voluntarily dismissed before trial would not trigger forfeiture. It also awarded him costs.
The Court’s Holding
The Court of Appeal reversed. It held that the judicially created paper-contest exception does not apply to a trust governed by California’s current statutory scheme for no-contest clauses.
The matter returns to probate court to decide under Probate Code sections 21310 and 21311 whether the father’s petition was a covered contest and, if so, whether it was brought without probable cause. The related cost award was also reversed.
Key Takeaways
- Current Probate Code provisions, not an early twentieth-century judicial exception, govern enforcement of no-contest clauses.
- Voluntary dismissal does not automatically insulate a beneficiary’s challenge from a forfeiture clause.
- The probate court must separately determine whether the filing qualifies as a contest and whether probable cause existed.
- Drafting and litigation strategy should account for the statutory definitions in sections 21310 and 21311.
Why It Matters
Trust beneficiaries cannot assume they may file and later withdraw an attack without consequences. Probate counsel should evaluate probable cause before filing and should draft no-contest provisions with the modern statutory limits firmly in view.