As a result of the confusing interplay between the current statutory scheme, the former statutory scheme, and the accompanying case law, no-contest clauses are now governed by what counsel might regard as three different enforcement regimes. The applicable regime should depend on the date that the instrument in question became irrevocable.
- Instruments that became irrevocable on or after January 1, 2010, are governed by the statutory scheme codified at Prob C §§21310–21315.
- Instruments that became irrevocable on or after January 1, 2001, but before January 1, 2010, are presumptively governed by the statutory scheme codified at Prob C §§21310–21315. However, under certain circumstances, Prob C §3 might permit application of the law that was in existence when the instrument became irrevocable. Donkin v Donkin (2013) 58 C4th 412. This might lead the court to apply the repealed statutory scheme at former Prob C §§21300–21322.
- Instruments that became irrevocable before January 1, 2001, should be governed by former law, i.e., by the repealed statutory scheme at Prob C §§21300–21322 or by pre-2001 case law.
This divergence between enforcement schemes arose from a growing concern that the strict enforcement of no-contest clauses was increasing litigation rather than reducing it. Over time, some practitioners came to the conclusion that the increasingly common requests for safe harbor rulings were creating an unproductive burden on the courts and beneficiaries and causing delay in the administration of estates and trusts. This view led the legislature to request a study by the California Law Revision Commission. In January 2008, the Commission issued a report recommending revision of the no-contest clause statutes. See 37 Cal L Rev’n Comm’n Reports 359 (2007).
The Commission’s report recommended that no-contest clauses in instruments that became irrevocable on or after January 1, 2001, should become enforceable only against three specified types of contests, starting January 1, 2010. The Commission’s report also recommended that the safe harbor procedure should apply only to three specific types of contest for instruments that became irrevocable on or after January 1, 2001. Regarding enforcement of no-contest clauses in instruments that became irrevocable before January 1, 2001, the report recommended that existing law continue to apply. In 2008, the legislature enacted Stats 2008, ch 174, repealing the existing Part 3 of Division 11 of the Probate Code (former Prob C §§21300–21308 and 21320–21322) and adding a new Part 3 (Prob C §§21310–21315), operative January 1, 2010. In doing so, the legislature generally followed the Commission’s recommendations, except that it repealed the statutory safe harbor procedure completely for instruments that became irrevocable on or after January 1, 2001.
The result was to establish two divergent enforcement regimes regarding no-contest clauses, with the split taking place on January 1, 2010. On its face, the new statutory scheme was to apply to all instruments that became irrevocable on or after January 1, 2001. But as a practical matter, given the issue of statutory retroactivity and the effect of Prob C §3, there are now three separate enforcement regimes, with each of them governing instruments that became irrevocable at a different point in time.
Thus, the starting point is the question of when the instrument containing the no-contest clause became irrevocable.