Trust no-contest clause not triggered by challenge to handwritten note

How does a handwritten note affect a trust no-contest clause?

Many trust settlors, especially in their later years, decide at some point to make changes to their trust. Very often, they make those changes by writing notes on their trust. Sometimes they make a change by crossing out certain parts and writing something in. The beneficiary affected by those changes often wants to challenge them because of his or her reduced inheritance. When the trust contains a no-contest clause, the beneficiary is hesitant to contest the trust for fear of being disinherited. Beneficiaries need to consider how a handwritten note on the trust that is signed or has the initials of the creator may affect their inheritance.

Here is an example of a handwritten note case in California.

One of California’s appellate court recently ruled on this situation in Cory v. Toscano. Louie Friguglietti created a trust in 2005. Before his death in 2006 he amended his trust twice. In addition to those trust amendments, Mr. Friguglietti changed part of his trust by putting a line through a bequest and handwriting some notes reducing the bequest. This change had serious consequences for the beneficiary. Originally, the trust provided she would receive the net proceeds from the sale of 28.5 acres of land. The handwritten change reduced her inheritance to 25% of the net proceeds from the sale of that land.

Unhappy with this change, the beneficiary filed a “safe harbor” petition with the probate court. She sought a determination that her proposed trust contest petition would not violate the no-contest clause of the trust. Her proposed trust contest petition asserted the interlineations could not be considered a trust amendment or modification because there not identified as such and were not made in accordance with the trust’s explicit amendment provision.

This trial court decided the petition did not violate the no-contest clause.

The trial court ruled the proposed petition did not violate the no-contest clause because the handwritten notations qualified as an instrument other than the instrument containing the no-contest clause. California laws defines an instrument as a will, trust, deed, or other writing that designates a beneficiary or makes a donative transfer.

The Court of Appeal upheld the decision on some rather interesting grounds.

The other beneficiary argued the proposed petition to the probate court was a trust contest because the handwriting is not a separate instrument or document. In short, the handwriting is physically part of the trust itself and only has meaning by incorporating the relevant trust provisions.

The Court of Appeal observed the handwritten notations on the trust were made after the trust was signed.

That, reasoned the Court, means the handwritten notations are not part of the original trust and therefore not part of the instrument containing the no-contest clause. The Court went further explaining that though the handwriting was physically part of the original trust document, the handwriting was made at a later point in time. This makes the handwriting “temporally separate” from the original trust. Safe harbor protection, said the Court, does not require a physically separate document. Since the trust settlor did not also hand write a new no-contest clause, the handwritten changes were subject to challenge without triggering the original no-contest clause.

If you are facing an issue with a handwritten note on a trust that affects the way you inherit, call us! We can help you determine if you are able to contest and if that would violate the no-contest clause of the trust or if this would be an option you could use. Get your free copy of our book on Winning the Inheritance Battle, or contact us to schedule your free 30-minute phone consultation with an attorney.