Seeking a “Safe Harbor” in a No Contest Clause

For more than a century, the general rule in California was that no-contest clauses are enforceable, subject to certain public policy exceptions. The underlying theory was that a testator or settlor should be free to condition a gift on the beneficiary’s acquiescence to other terms of the instrument, provided those conditions did not violate public policy.

Over the years, no-contest clauses evolved to cover much more than traditional will contests based on claims of undue influence or lack of capacity. Practitioners developed broadly worded no-contest clauses that sought to disinherit a beneficiary who undertook almost any action that challenged the testator’s or settlor’s estate plan or its administration, except actions that were immune on public policy grounds.

Starting in 1989, the legislature developed statutory provisions codifying much of the case law concerning the enforceability of no-contest clauses. See former Prob C §§21300–21307. In subsequent years, the legislature added refinements, including a procedure for potential litigants to seek a “safe harbor” ruling from the court in advance of filing a proposed action, to determine whether the proposed action would be a contest and trigger a forfeiture (former Prob C §21320). While the safe harbor procedure was pending, the statute of limitations on the underlying action was tolled. Former Prob C §21308.

In light of the drastic impact of violating a no-contest clause and the potentially wide scope of a broadly worded clause, it became essential to pay careful attention to whether a proposed action would amount to a contest. Thus, it became standard practice for potential litigants to seek a safe harbor ruling before filing anything that might be a contest. If the court ruled that a proposed action would not be a contest, the potential litigant was at liberty to proceed without fear of a forfeiture. If the court ruled that a proposed action would be a contest, the potential litigant could decide whether or not the potential benefits of the claim outweighed the possibility of forfeiture.

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