Could seeking judicial enforcement of a trust's no-contest clause implicate the state's anti-SLAPP statute?

Charles E. Rounds, Jr.

On January 1, 2013, I posted on JDSUPRA some content entitled "Trial lawyers beware of the in terrorem trust clause: A nasty trap that can keep on springing," which is still accessible. The focus of the piece is the lawyer who negligently proceeds to initiate a “trust contest” on behalf of a trust beneficiary in the face of a no-contest/ in terrorem clause and in so doing puts at risk his client’s equitable property rights under the trust. In other words, initiating a trust contest can have its risks if one is not careful. Now we have Urick v. Urick, Calif. Court of Appeal, 2nd Appellate Dist., Div. 5 (B278257) (Oct. 5, 2017), in which it is suggested that the defense of a trust-contest action via the invocation of a no-contest/in terrorem clause also can have its risks. Here are the Urick facts: A trust beneficiary filed a petition for instructions as to whether the “no contest” clause in his mother’s trust had been violated after his sister sought to reform the trust to eliminate his equitable interest. The sister, in her capacity as trustee, filed a special motion to strike the petition under California’s Code of Civil Procedure section 425.16 (the anti-SLAPP statute), which the probate court granted. SLAPP is an acronym for “Strategic Lawsuit Against Public Participation.” Initiating litigation with probable cause is generally an activity protected under the anti-SLAPP statute. The appellate court determined that the plain language of the anti-SLAPP statute does apply to a petition to enforce a no contest clause. It, however, concluded that the brother had established the minimal merit necessary to show a probability of his succeeding at this stage of the proceedings. The order of the probate court, therefore, was reversed. The Urick decision accompanies this posting below.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Charles E. Rounds, Jr., Suffolk University Law School | Attorney Advertising

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