Can a defense of a contested trust amendment trigger a no contest clause? In Key v. Tyler the Court answered “yes” it may, depending on the facts and circumstances of the case (California Court of Appeal, 2nd District, Case No. B322246 (Filed 5/28/24)).
In Key v. Tyler the Trustors (Thomas and Elizabeth) executed their original Trust in 1999. The trust contained a no-contest clause which in part stated as follows:
“. . . if any devisee, legatee or beneficiary under this Trust, or any legal heir of the Trustors or person claiming under any of them directly or indirectly (a) contests either Trustor’s Will, this Trust, or any other trust created by a Trustor, or in any manner attacks or seeks to impair or invalidate any of their provisions,. . . then in that event Trustors specifically disinherit each such person, and all such legacies, bequests, devises, and interest given under this Trust to that person shall be forfeited as though he or she had predeceased the Trustors without issue, and shall augment proportionately the shares of the Trust Estate passing under this Trust to, or in trust for, such of the Trustors’ devisees, legatees and beneficiaries who have not participated in such acts or proceedings.”
The Trustors had three children: Tyler, Key, and a third sister who was not involved in the litigation.
In 2003 the Trustors subsequently executed an Amendment to the Trust – the 2003 Amendment was a one-page document that made some dispositive changes but did not restate or entirely change the provisions in the 1999 Trust – thus, the 1999 Trust remained relevant and applicable except as changed by the provisions in the one-page 2003 Amendment. The 2003 Amendment did not contain a no contest clause.
Husband Thomas subsequently died in 2003, and surviving spouse Elizabeth purportedly executed another Amendment in 2007. Pursuant to the Court “Tyler used her influence over Elizabeth to obtain the 2007 Amendment.” Beneficiary Key filed an action and successfully invalidated the 2007 Amendment on the ground that Tyler unduly influenced their mother into executing the 2007 Amendment. Against Key’s action Tyler defended the 2007 Amendments which differed from some of the provisions in the original 1999 Trust. Tyler also was a beneficiary under the 1999 Trust but would have inherited differently under the 2007 Amendment if that Amendment had not been invalidated.
Key v. Tyler is a long 20+ page Opinion which contains many relevant discussions on legal issues. However, I am writing about the Opinion here because of the discussion relating to the no contest clause in the 1999 Trust and the consequences of the litigation pertaining to the 2007 Amendment.
The Court held that Tyler’s defense of the 2007 Amendment was a contest of the 1999 Trust, and that Tyler not only did not recover under the 2007 Amendment which the Court invalidated, but also disinherited herself from what she would have recovered under the original 1999 Trust or under the 2003 Amendment pursuant to the broadly worded no contest clause that was contained in the earlier original 1999 Trust. In other words, as a result of losing on the 2007 Amendment, and there being a broadly worded no contest clause in the original 1999 Trust, Tyler lost everything and recovered nothing.
Takeaway: careful consideration needs to be given to the existence of no contest clauses contained in any and all possibly relevant trust and estate disposition instruments and documents, and to the specific wording of each possibly applicable no contest clause, as even defending a later in time subsequent instrument also may in appropriate circumstances trigger a no contest clause in an earlier instrument.
The following is a case caption scan from the Opinion in Key v. Tyler:
Best to you, David Tate, Esq.
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David Tate, Esq. (and inactive California CPA) – practicing only as an attorney in California.
David Tate, Esq. California (and inactive CPA) – Trust, estate, probate and elder abuse disputes, litigation and contentious administrations and special assets; business litigation and internal and co-owner business disputes, litigation, governance, boards, investigations and audit; real property and co-owner disputes and litigation; mediator and dispute resolution services; and social and digital media for law, people, businesses and legal risk management. 