BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2007-2008 Regular Session
SB 1264 S
Senator Harman B
As Amended March 24, 2008
Hearing Date: April 8, 2008 1
Probate Code 2
GMO:rm 6
4
SUBJECT
Wills and Trusts: No Contest Clause
DESCRIPTION
A "no contest clause" is a provision in an otherwise valid
instrument that, if enforced, would penalize a beneficiary
if the beneficiary files a contest with the court.
California requires strict construction of a no contest
clause, and, except as specifically provided, a no contest
clause is enforceable against a beneficiary who brings a
contest within the terms of the no contest clause. The no
contest clause statutory scheme contains some 18 types of
pleadings that a beneficiary may file without fear that a
no contest clause will be enforced. Some of these pleadings
are classified as direct contests, others are indirect
contests. Further, under existing law a no contest clause
will not be enforced where the beneficiary's contest based
on reasonable cause is upon the grounds of forgery,
revocation, or the disqualification of a beneficiary, or
where the beneficiary's contest is based on probable cause
that a provision benefits a person who drafted or
transcribed the instrument, or who gave directions to the
drafter of the instrument concerning dispositive provisions
of the instrument, or who acted as a witness to the
instrument. Finally, the no contest statutory scheme
allows a beneficiary to seek declaratory relief from the
court for a determination of whether a particular motion,
petition, or other act by the beneficiary would be a
contest within the terms of the no contest clause.
(more)
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The bill would repeal the current statutory scheme and
enact new Probate Code provisions that would govern the
enforcement of no contest clauses.
The bill would define a no contest clause in almost
identical language as existing law, but expand the list of
grounds for a direct attack that would make a no contest
clause unenforceable, unless there is no probable cause for
the direct contest.
The bill would specify which contests filed by a
beneficiary would make a no contest clause in an instrument
enforceable against the beneficiary and limit the use of
declaratory relief for a pre-determination of whether a
pleading would constitute a contest only to contests
involving creditor claims or property ownership disputes.
Specifically, the bill would:
(1) provide that a no contest clause is enforceable
against a beneficiary who files one of the following
contests: a direct contest without probable cause, a
creditor's claim, a property ownership dispute;
(2) provide that the declaratory relief procedure may
be used only to determine whether a no contest clause
should be applied to a creditor claim or property
ownership dispute; and
(3) extend the probable cause exception to the
enforcement of a no contest clause to all direct
contests, rather than only to some types of direct
contests.
The bill would become effective on January 1, 2010. (Note
however, author's amendments to be offered in committee.
See Comment 5 on page 12.)
BACKGROUND
A no contest clause is a provision in a will, trust, or
other instrument to the effect that a beneficiary who
contests or attacks the instrument or any of its provisions
forfeits any gift made by the instrument or takes a reduced
share.
The law governing enforcement of a no contest clause was
enacted in 1990 upon recommendation of the California Law
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Revision Commission (CLRC). It has been amended many times
since then, adding to a growing list of specific exceptions
to enforcement of the clause, the most recent in 2002. The
longstanding general rule in California is that a no
contest clause will be enforced. "No contest clauses are
valid in California and are favored by the public policies
of discouraging litigation and giving effect to the
purposes expressed by the testator." (Burch v. George
(1994) 7 Cal.4th 246, 254.)
Much litigation has ensued over the enforcement of no
contest clauses since the Legislature enacted Probate Code
Section 21303 et seq. In 1995, the CLRC recommended the
repeal of these provisions. At the time, probate law
practitioners objected, and the Legislature relented by
enacting restrictions to the use and application of the no
contest clause in specified circumstances. In 2002, SB
1878 (Poochigian, Ch. 150) revised and recast the no
contest provisions, listing the types of proceedings that
do not constitute a violation of a no contest clause.
SCR 42 (Campbell, Res. Ch. 122, Stats. 2005) directed the
CLRC to study the enforcement of no contest clauses, report
on the advantages and disadvantages of enforcement of the
clause, and present the Legislature with the broad range of
options, including possible modification or repeal of the
no contest clause, as well as the potential benefits of
maintaining current law.
SB 1264 results from the report prepared by the CLRC
pursuant to SCR 42 and submitted to the Legislature in
January 2008.
CHANGES TO EXISTING LAW
Existing law provides that a no contest clause is
enforceable against a beneficiary who brings a contest
within the terms of the no contest clause. Existing law
specifies exceptions to this general rule. (Probate Code
Section 21303. All references are to the Probate Code
unless other wise indicated.)
Existing law defines direct contests, indirect contests,
actions not constituting contests, reasonable cause or
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probable cause for bringing specific types of contests to
which a no contest clause does not apply, proceedings that
do not violate a no contest clause as a matter of public
policy, and limitations to the application of these rules
to specified proceedings, instruments, codicils,
amendments, or actions. (Sec. 21300 et seq.)
Existing law authorizes a beneficiary, in a variety of
situations, to seek declaratory relief regarding whether or
not the bringing of a proceeding constitutes a violation of
a no contest clause. (Sec. 21320 et seq.)
This bill would repeal these provisions and enact new rules
regarding enforcement of no contest clauses.
This bill would define a no contest clause as a provision
in an otherwise valid instrument that, if enforced, would
penalize a beneficiary for filing a pleading in any court.
This bill would provide that a no contest clause is
enforceable against the following contests:
(1) a direct contest that is brought without probable
cause;
(2) if the no contest clause so provides, a pleading to
challenge a transfer of property on the grounds it was
not the transferor's property at the time of the
transfer; and
(3) if the no contest clause so provides, the filing of
a creditor's claim, or prosecution of an action based
on the claim.
This bill would define a direct contest as an attempt to
invalidate an instrument on one or more of the following
grounds: forgery; lack of due execution; lack of capacity;
menace, duress, fraud, or undue influence; revocation of
the instrument; or disqualification of a beneficiary.
This bill would provide that probable cause exists if, at
the time of filing a contest, the facts known to the
contestant would cause a reasonable person to believe that
there is a reasonable likelihood that the requested relief
will be granted given the opportunity for further
investigation or discovery.
This bill would authorize a beneficiary of an instrument
that has become irrevocable to apply to the court for a
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determination of whether a no contest clause could be
enforced against a pleading to challenge the transfer of
property or filing of a creditor's claim.
COMMENT
1.Need for the bill
The California Law Revision Commission (CLRC) is the
sponsor of SB 1264. The CLRC's recommendation to repeal
and recast the no contest clause provisions of the
Probate Code intends to address two problems with
existing law.
The first problem is that the complexity of current
statutory and common law exceptions to the general rule
that a no contest clause is enforceable has created
uncertainty as to the scope of application of the clause.
"That uncertainty leads to widespread use of declaratory
relief to construe the application of no contest clauses,
adding an additional layer of litigation that does
nothing to resolve the substance of any underlying
issues."
Thus, the tact taken by the CLRC is to simplify the
statute, and reverse its approach. Rather than maintain
that a no contest clause is enforceable, but provide
numerous exceptions, this bill would make it enforceable
only as to specified actions or proceedings. "The
proposed simplification would result in minor substantive
changes to the law governing the application of a no
contest clause. Those changes would be consistent with
and strengthen the general policies underlying the
existing statute," the CLRC report states.
The second problem is that, according to the CLRC, a no
contest clause can be used to shield fraud or undue
influence from judicial review. A person who procures a
testamentary gift through fraud or undue influence can
use a no contest clause to deter other beneficiaries from
challenging the gift to that person. The CLRC recommends
that the probable cause exception, currently available
for many direct contests, be broadened so that it may be
applied to all direct contests. With probable cause,
therefore, a beneficiary can challenge a gift made by the
donor on the grounds of menace, duress, fraud, or undue
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influence, with no fear of forfeiture under a no contest
clause.
2.Revisions to no contest clause carefully balance
conflicting public policies
Pursuant to the Legislature's directive, the CLRC
reviewed the various policies favoring enforcement of no
contest clauses as well as policies favoring
non-enforcement, studied various states' approaches and,
based on the review, opted to recommend the imposition of
clear limitations on the enforceability of a no contest
clause, rather than its repeal.
The public policies favoring enforcement of a no contest
clause include:
(1) respect for a person's ability to control the use
and disposition of his or her own property, such as
the power to make a gift during life or after death;
(2) avoidance of litigation (and the costs, delays, and
possible discord among beneficiaries that could
result) that could thwart the donor's intent to make
an orderly distribution of his or her estate;
(3) preservation of the privacy of the family;
(4) avoidance of a forced settlement of a demand for a
larger gift by a disappointed beneficiary (whose
bargaining position would be reduced if a nuisance
suit would forfeit the gift made under the estate
plan);
(5) avoidance of property ownership disputes; and
(6) continuity of the substance of the law (i.e., avoid
excessive costs that could be incurred by estate plans
drafted in reliance on existing law).
On the other hand, proponents of a repeal (i.e., making
no contest clauses unenforceable in California), contend
that several public policy concerns can trump a
transferor's intention when he or she created a no
contest clause. They state, for example, that as a
general matter, a person should have access to the courts
to remedy a wrong or protect important rights, and a no
contest clause works against that policy. Because
forfeiture is such a harsh penalty, it is disfavored as
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a matter of policy, and "a court is required to strictly
construe it and may not extend it beyond what was plainly
the testator's intent." (Burch v. George (1994) 7 Cal.4th
246.) Additionally, there are concerns that a no contest
clause may be used by an unscrupulous person to deter
inquiry into whether a gift in an estate planning
instrument was procured through menace, duress, fraud, or
undue influence, or to force an election (i.e., a
beneficiary is forced to choose between a gift that may
be less than expected, or, in view of the cost of
litigation, a lesser settlement amount than the
beneficiary would have liked). Especially when applied
to a donor's unilateral disposition of community property
(which violates public policy), a no contest clause
contest brought by an elderly spouse could be
devastating.
1.No contest clause still enforceable in California, but
limited to specified contests
The CLRC recommends that the Probate Code provisions
governing no contest clauses be repealed and recast from
a different perspective. Rather than have a growing list
of exceptions to the general enforceability of a no
contest clause, SB 1264 would limit the enforceability of
a no contest clause to a defined list of contests.
a. Definition of "contest"
A "contest," under existing law, means any action
identified in a "no contest clause" as a violation of
the clause. The term includes both direct and
indirect contests (Sec. 21300(a)-(c)) and is
open-ended. It can include any pleading in any
proceeding in any court that challenges the validity
of an instrument or one or more of its terms. Thus,
any court pleading that affects estate assets or the
operation of an instrument could potentially be
governed by a no contest clause. (See Hermanson v.
Hermanson (2003) 108 Cal.App.4th 441 (petition to
remove trustee); In re Estate of Goulet (1995) 10
Cal.4th 1074 (action to enforce premarital agreement);
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Burch v. George, supra (action to determine whether
alleged estate asset is community property).) The CLRC
states that interpretation of what is and what is not
a contest thus depends to a large extent on the
language of the no contest clause itself, and if
stated broadly or imprecisely, its scope of
application may be uncertain. Thus, argues the CLRC,
it is better to clearly state what proceedings are
direct contests a beneficiary can bring without fear
of a no contest clause operatively cutting off the
beneficiary's gift under the instrument.
Direct contests, under existing law, are pleadings
alleging the invalidity of an instrument or one or
more of its terms based on one or more of the
following: (1) revocation; (2) lack of capacity; (3)
fraud; (4) forgery; (5) misrepresentation; (6) menace;
(7) duress; (8) undue influence; (9) mistake; and (10)
lack of due execution.
Indirect contests are pleadings in any proceeding in
any court that indirectly challenges the validity of
an instrument or one or more of its terms based on a
ground other than those listed for direct contests and
does not contain any of those grounds. These "other
grounds" are the public policy exceptions to the
general rule that no contest clauses are enforceable
and those brought on the basis of reasonable or
probable cause. (See Comment 4.)
SB 1264 on the other hand defines "contest" to mean a
pleading filed with the court by a beneficiary that
would result in a penalty under a no contest clause,
if the no contest clause is enforced. The statutory
reference to direct and indirect contests would be
eliminated. Because the approach taken by SB 1264 is
to limit the enforceability of no contest clauses to
defined pleadings filed by a beneficiary, the need for
the public policy exceptions and other bases for
indirect contests would disappear. The CLRC claims
that "the substantive effect of [this] change would be
relatively modest," but it would "eliminate a
significant source of complexity and confusion in
existing law." The CLRC also states that in fact,
there are some other bases for indirect contests that
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should negate the enforceability of a no contest
clause as a matter of public policy (e.g., there is no
public policy exception for a petition under the
Uniform Principal and Income Act, which it arguably
should). By removing indirect contests from the
definition of contest, SB 1264 would effectively limit
the application of a no contest clause.
b. What pleadings would constitute a contest to which
enforcement of a no contest clause would apply
SB 1264 would provide that a no contest clause is
enforceable only against the following contests:
(1) a direct contest without probable cause
By limiting the applicability of a no contest clause
to direct contests without probable cause, the bill
would ensure that a beneficiary's direct attack on
the validity of an instrument based on the following
grounds would not result in forfeiture of a gift to
the beneficiary, even if the beneficiary were to
lose the challenge:
Fraud, duress, menace, or undue influence
Lack of due execution
Forgery
Lack of capacity of the donor
Revocation of the instrument
Disqualification of a beneficiary
Under current law, what constitutes a "contest" is
open-ended, and may include any pleading in any
proceeding in any court that challenges the validity
of an instrument or one or more of its terms. (Sec.
21300(a) - (c).)
The CLRC clearly recommends that no pleadings other
than those listed above should constitute a direct
contest, and that by listing them in statute, the
grounds for a direct contest would be limited and
clear.
(1) a pleading to challenge the transfer of
property on the grounds that it was not the
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transferor's property at the time of the transfer,
if a no contest clause expressly provides for its
application to this pleading
Current law provides for the application of a no
contest clause to an action or proceeding to
determine the character, title, or ownership of
property. (Sec. 21305(a)(2).) This language allows
a transferor to create a forced election, where a
beneficiary who contests the transferor's ownership
of the transferred assets forfeits any gift to that
beneficiary under the estate plan. The CLRC
concluded that this statutory language is overbroad,
such that any action that would determine a
beneficiary's right to a gift under an estate plan
could be characterized as an action to determine the
"ownership of property."
Under SB 1264, a no contest clause could be enforced
against a pleading to challenge the transfer of
property on the specific grounds that the property
was not the transferor's at the time of the
transfer. This language preserves the substance of
existing law, while avoiding its overbroad
interpretation. Thus, a transferor would still have
the ability to use a no contest clause to create a
forced election with respect to such disputes of
property. Further narrowing this provision, SB 1264
would enforce a no contest clause as to this type of
pleading only if the no contest clause itself
expressly provides for its application in this
instance.
This provision, as drafted, could have some
unintended consequences to post-death distribution
of community property. For example, Husband (H) and
Wife (W) own property they acquired during marriage,
but used some of each spouse's separate property for
the acquisition. Years later, H dies, leaving a will
that gave certain property to his children by a
first marriage, and the rest to W, with a no contest
clause to force W to elect between enforcing her
community property rights and accepting the terms of
the will. W can challenge H's ownership right to
the property given to H's children, because part of
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it could have been community property acquired with
her separate property. Under SB 1264, if W mounts
this challenge, the no contest clause would be
enforceable only if the clause itself provides that
it is intended to apply to this property dispute.
If the no contest clause does not so provide, the
challenge mounted by W would not result in her
forfeiture of the share already given to her, and
could, with sufficient evidence of ownership at the
time of execution of the no contest clause, even
result in her receiving more of the property given
to H's children. But careful drafting of the no
contest clause could thwart W's challenge.
The Trusts and Estates Section of the State Bar
suggests that, in cases involving community
property, the statute provide that a disposition by
conditional gift of community property (requiring W
to agree in writing to the non pro rata distribution
of community interest in the property) would be more
useful, because it would allow W to file a pleading,
without fear of forfeiture, to depose an expert to
determine the aggregate value of the distribution
plan to each beneficiary. This suggestion is based
on current Probate Code Sec. 100(b) that provides
spouses may agree in writing to divide community
property on the basis of a non pro rata division of
the community property's aggregate value, rather
than on the basis of a division of each individual
item or asset of community property.
There seems to be merit to the position taken by the
Trusts and Estates section of the State Bar. By
using the conditional gift method of disposition of
community property, W would not be punished for
accessing the court for the purpose of making an
informed decision about the election that W, the
surviving spouse, has to make under H's will, even
if the no contest clause specifies its applicability
to the filing of a challenge.
SHOULD THE NO CONTEST CLAUSE PROVISION FOR PROPERTY
OWNERSHIP DISPUTES CONTAIN AN EXEMPTION AS
DESCRIBED ABOVE?
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(2) the beneficiary's filing of a creditor's claim
or prosecution of an action based on it, if a no
contest clause expressly provides for that
application
The CLRC was concerned that a no contest clause
statute preclude unintended application of the
clause to a debt that the transferor did not have in
mind at the time of execution of the no contest
clause and that was never intended by the transferor
to be governed by the no contest clause. Some
practitioners advocated language that would in
effect require that a no contest clause specifically
identify the debts that it is intended to govern, or
specific language that a no contest clause applies
only to debts that predate the execution of the
instrument containing the no contest clause.
However, the CLRC opted for the broader language (if
a no contest clause expressly provides for the
application to a creditor claim) so that a no
contest clause may apply to all creditor's claims,
whether identifiable at the time of execution of the
clause or not. This, according to the CLRC, could
deter beneficiaries from bringing fabricated claims
after the transferor's death.
For example, Dad executes a will that contains a no
contest clause, specifically stating that it shall
be enforceable against any creditor claim filed by
his beneficiaries, and that should such a claim be
made and prosecuted against his estate, the
beneficiary would have to forfeit a specific gift to
the beneficiary. Years before his death, Dad
borrowed $100,000 from his daughter to help pay off
a mortgage on real property owned by Dad. Dad's
estate grew over time, and it is now worth $2
million. Dad dies, having forgotten about the
$100,000 loan from his daughter and leaving his
estate equally to his son and daughter. A no
contest clause in his trust provides that a
beneficiary who makes a creditor's claim against the
estate would forfeit half of his or her share to the
other beneficiary. Under SB 1264, the daughter would
be subject to an enforceable no contest clause if
she files a creditor's claim for the $100,000
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against the entire estate. If the no contest clause
is general in its language (i.e., any contest
brought by any beneficiary would make a gift to that
beneficiary subject to forfeiture), the no contest
clause would not be enforceable and the daughter may
file a creditor's claim for the $100,000 without
risking her share of Dad's estate.
1.Probable cause exception expanded
Existing law already provides a probable cause exception
for a contest on the following grounds: forgery,
revocation, disqualification of a beneficiary, the
beneficiary drafted or transcribed the instrument or
directed the drafter of the instrument, or the
beneficiary is a witness to the instrument. The CLRC
study concluded that these grounds, other than forgery
and revocation, are aimed at a common ground, that of
undue influence. The CLRC sees no policy justification
for leaving out incapacity, menace, duress, or lack of
due execution from the list of probable cause exceptions
for a contest. Thus, SB 1264 would extend the existing
probable cause exception to all types of direct contests
(as defined above in Comment 3a). This "would provide
greater latitude to contest an instrument that is
believed to have been the product of fraud, undue
influence, or other misconduct," according to the CLRC.
SB 1264 would provide that probable cause exists if, at
the time of filing a contest, the facts known to the
contestant would cause a reasonable person to believe
that there is a reasonable likelihood that the requested
relief will be granted, given the opportunity for further
investigation or discovery. This definition of probable
cause is drawn from existing Sec. 21306, with two
substantive changes: (1) SB 1264 would require a
likelihood that the requested relief will be granted
(existing law focuses only on the likelihood that the
contestant's "factual contentions" will be proven); and
(2) SB 1264 would require a "reasonable likelihood" of
being granted relief.
By requiring that even a direct contest should be based
on probable cause, SB 1264 would continue to promote the
policy behind a no contest clause, i.e., to deter a
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beneficiary from pursuing a frivolous claim.
The Trusts and Estates Section of the State Bar supports
the application of probable cause to filings involving
disputes regarding property ownership and creditor's
claims, not just to direct contests as provided under SB
1264. They claim that elder abusers could easily use no
contest clauses to set aside gifts to family members or
to deny their creditor's claims, no matter how valid the
gift to the family member or the family member's
creditor's claim (for example, last medical bills paid by
children unreimbursed by insurance carrier). With a
probable cause requirement, however, they contend that
elder abusers would be less likely to succeed, and these
types of disputes are more likely to be resolved more
promptly and at less expense.
The CLRC rejects these arguments for a probable cause
requirement as applied to disputes regarding property
ownership and creditor's claims because such a
requirement could thwart the transferor's or donor's
entire estate plan by removing the forced election option
from transferor's cache of methods by which to distribute
the estate as he or she intends.
2.Retroactivity issues
SB 1264 would become operative on January 1, 2010,
providing a one year grace period for those who wish to
revise their estate plans before the new law takes
effect. However, the bill also provides that its
provisions would not apply to an instrument that became
irrevocable before January 1, 2001, which is the
effective date of the existing scheme of statutory
exceptions to the enforcement of a no contest clause.
Those instruments would be governed by the existing
statutory scheme for enforcement of no contest clauses.
SB 1264 would apply to any instrument that became
irrevocable on or after January 1, 2001. This would be
consistent with the current language in Probate Code Sec.
21305 (listing some 18 actions not constituting a contest
for purposes of a no contest clause) that makes the
section inapplicable to instruments or no contest clauses
executed prior to January 1, 2001 but rather applicable
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to instruments of decedents dying on or after January 1,
2001 (with certain exceptions).
The Trusts and Estates Section advocates complete
retroactivity of SB 1264, leaving it to the courts to
determine whether application of the new law to
instruments that became irrevocable prior to January 1,
2010 would substantially interfere with the rights of
beneficiaries or other interested parties, in which case
the court could apply the old law under the authority of
Sec. 2(h).
The CLRC disagrees with the total retroactivity proposal
for SB 1264. The current language of the bill would be
consistent with existing law, leaving only the gap
between January 1, 2001 and January 1, 2010 subject to
limitations imposed by Section 3, which provides a
default rule of retroactive application for changes in
the Probate Code, with specific exceptions preserving the
effect of certain completed acts and orders (Secs.
3(c)-(f)) and the general exception in Sec. 3(h). This
approach would provide more certainty for those
instruments that became irrevocable prior to January 1,
2001 and reduce the burden on the courts that would be
created by total retroactivity.
Author's amendments to be offered in committee would
delete the operative date of January 1, 2010, and make SB
1264 inapplicable to instruments executed prior to
January 1, 2009. This would leave the courts to apply
the existing law to no contest clauses in instruments
executed prior to January 1, 2009.
3.Reduction of declaratory relief petitions
SB 1264 retains the existing declaratory relief procedure
in Sec. 21320, which allows a beneficiary, after the
instrument containing the no contest clause has become
irrevocable, to apply to the court for a determination of
whether the no contest clause could be enforced against a
particular pleading by a beneficiary. The court would be
prevented from making a determination if the
determination would depend on the merits of the proposed
pleading (i.e., the underlying grounds for the pleading).
The CLRC states that by limiting the application of a no
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contest clause to an exclusive list of defined contest
types, SB 1264 would eliminate much of the uncertainty
that arises under existing law. That uncertainty, the
Commission states in its study, "leads to over-reliance
on the declaratory relief procedure, to protect
beneficiaries from any chance of unexpected forfeiture."
Thus, the declaratory relief available to any contest in
existing law would be limited under SB 1264 to contests
involving a pleading to challenge a transfer of property
on the grounds the transferor did not own the property at
the time of the transfer and a beneficiary's filing of a
creditor's claim against the estate.
The Judicial Council supports SB 1264 because the bill
would reduce the number of declaratory relief petitions
that are being filed with the courts. "These declaratory
relief actions are time consuming and burdensome for the
courts," the Judicial Council states, noting that a CLRC
survey identified the cost and delay associated with
declaratory relief proceedings as one of the most common
and serious problems with no contest clauses.
The Trusts and Estates Section of the State Bar on the
other hand advocates for a repeal of declaratory relief
to determine whether a proposed pleading will be a
contest for purposes of a no contest clause. They cite
the ninefold increase in the number of reported appellate
decisions in no contest clause litigation (there were 17
reported cases between 1909 and 1991, 26 between 1992
through the end of 2007), although the increase could
also be attributed to the increasing complexity of estate
plans from 1909 to 2007, or to a number of other reasons.
4.Miscellaneous provisions
SB 1264 contains miscellaneous provisions in existing law
that would otherwise be eliminated by the repeal of the
current statutory scheme for enforcement of no contest
clauses. Those are:
Proposed Sec. 21312: in determining the intent
of the transferor, a no contest clause shall be
strictly construed (former Sec. 21304);
Proposed Sec. 21313: this act is not intended
as a complete codification of the law governing
enforcement of a no-contest clause and clarifies
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that common law governs to the extent these
provisions do not apply (former Sec. 21301); and
Proposed Sec. 21314: this act would apply
notwithstanding a contrary provision in the
instrument (former Sec. 21302).
Finally, SB 1264 provides a definition for a new phrase
("protected instrument") used in the context of no
contest clauses. Proposed Sec. 21310(e)(1) provides that
a "protected instrument" includes an instrument that
contains a no contest clause. A "protected instrument"
may include an instrument that expressly incorporates or
republishes a no contest clause in another instrument.
Proposed Sec. 21310(e)(2) is similar to former Sec.
21305(a)(3), which refers to an instrument outside of the
instrument containing the no contest clause, that is
being governed by the no contest clause.
1.Trusts and Estates Section of the State Bar position
Throughout the review of the no contest clause by the
CLRC, the Trusts and Estates Section of the State Bar and
other practitioners participated in the public
discussions and contributed to the shaping of this
legislation. Yet the Section will support the bill only
if the amendments described in various comments are made
to the bill.
Support: Judicial Council of California
Opposition: None Known
HISTORY
Source: California Law Revision Commission
Related Pending Legislation: None Known
Prior Legislation: SB 296 (Campbell, 2005) would have
eliminated enforcement of no contest clauses.
SCR 42 (Campbell, Res. Ch. 122, Stats. 2005)
directed the CLRC to study the operation of
the no contest clause statute and recommend
reforms.
SB 1264 (Harman)
Page 18 of ?
SB 1878 (Poochigian, Ch. 150, Stats. 2002)
revised and recast the no contest provisions,
listing the types of proceedings that do not
constitute a violation of a no contest
clause.
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