Withdrawing a Trust Contest May Not Protect You: Nelson v. Nelson and the California No-Contest Clause

Quick Answer: Under California Probate Code section 21310, a "contest" happens when a beneficiary files a pleading with the court that falls within the scope of a no-contest clause. How long the beneficiary pursues the pleading does not matter. In Nelson v. Nelson (2026), the Court of Appeal held that the old "paper contest" exception, which sometimes protected beneficiaries who filed and then abandoned a challenge, does not apply to trusts governed by the current statutes. Withdrawing a petition does not undo the filing. A court must still decide whether the clause covers the petition and whether the challenge was brought without probable cause.

Introduction

Some beneficiaries treat a trust challenge as a test run. They think they can file a petition, see how the other side reacts, and withdraw it if the strategy no longer makes sense. A California Court of Appeal decision issued on September 30, 2026, shows how risky that approach can be. In Nelson v. Nelson, the court held that a beneficiary who filed and then dismissed a petition to invalidate a trust could not rely on the older "paper contest" exception to avoid the trust's California no-contest clause. The decision is certified for publication, so courts throughout the state must follow it.

At Huber Law Group, our experienced estate planning attorneys advise beneficiaries who question whether a trust reflects a loved one's true wishes, and we draft no-contest clauses for clients who want to protect their estate plans from costly litigation. This article explains what happened in Nelson, why the court ruled as it did, and what beneficiaries and settlors should do now.

What Is a No-Contest Clause in a California Trust?

A no-contest clause, sometimes called an in terrorem clause, is a provision in a will or trust that penalizes a beneficiary who challenges the document. The penalty is usually forfeiture. A beneficiary who brings a covered challenge loses the gift he or she would otherwise receive under the instrument.

California has long upheld no-contest clauses because they honor the settlor's intent and discourage litigation by disappointed family members. California law also limits these clauses because forfeiture is a harsh result and courts need access to evidence when a document may truly be invalid.

To strike that balance, the Legislature adopted the current no-contest statutes, Probate Code sections 21310 through 21315, which became operative on January 1, 2010. Under section 21311, a no-contest clause may be enforced against only three types of action:

1. A direct contest brought without probable cause
2. A pleading challenging a transfer of property on the ground that the transferor did not own the property at the time of transfer, but only if the clause expressly applies to that type of pleading
3. The filing of a creditor's claim or prosecution of an action based on it, but only if the clause expressly applies to that type of claim

A "direct contest" is a contest alleging that the trust, or one of its terms, is invalid because of forgery, lack of due execution, lack of capacity, menace, duress, fraud, undue influence, revocation, or certain statutory disqualifications of a beneficiary. Courts strictly construe no-contest clauses, which means any ambiguity is resolved against forfeiture.

What Happened in Nelson v. Nelson?

A married couple created a family trust and restated it several times. The final restatement, signed in December 2013, left a $375,000 cash gift to the husband's father and placed another $375,000 in trust for the husband's mother. The restatement also included a no-contest clause. Any beneficiary who challenged the trust's validity without probable cause, on grounds such as lack of capacity, duress, fraud, or undue influence, would forfeit his or her gift.

The husband died in January 2014. The trust was fully administered, and the father received his $375,000 distribution. He also received proceeds from a life insurance policy on his son's life.

Several years later, the widow sued the father, claiming that she was entitled to half of the insurance proceeds because community property had paid the premiums. One week before mediation in that lawsuit, the father filed a petition to invalidate the December 2013 trust. He alleged fraud, duress, undue influence, and that his son lacked capacity because of heavy pain medication. The insurance lawsuit settled at mediation, and the father dismissed his trust petition shortly afterward. The petition had been on file for only eight days.

The widow then filed her own petition in Alameda County Superior Court. She asked the court to enforce the no-contest clause and to order the father to return the $375,000 he had received under the trust.

The probate court denied her request. It relied on a concept drawn from a 1909 California Supreme Court case, In re Estate of Hite, and a 2008 Court of Appeal case, Schwartz v. Schwartz. Under that line of authority, a "paper contest" that was filed and abandoned without further action did not trigger a no-contest clause. Because the father dismissed his petition quickly, the widow never responded, and no hearings took place, the probate court concluded that his filing was a paper contest.

The Court of Appeal, First Appellate District, Division Three, reversed.

Why Did the Court of Appeal Reject the "Paper Contest" Exception?

The Court of Appeal focused on the plain language of the current statutes. Section 21310 defines a contest as a pleading filed with the court by a beneficiary that would result in a penalty under a no-contest clause if the clause were enforced. The definition turns on the act of filing. It says nothing about how far the beneficiary pursues the case or whether the other side ever responds.

The court identified several additional reasons for its conclusion:

• The paper contest concept in Hite was dicta. It was not necessary to the 1909 decision, and it offered no guidance for deciding which filings qualified.
• Schwartz was decided in 2008, before the current statutes became operative, so it never considered the new statutory definition of a contest.
• When the Legislature wanted to require more than a filing, it said so. Section 21311 refers to the "prosecution" of an action based on a creditor's claim, which shows that the Legislature knew how to describe ongoing litigation and chose not to use that language for other contests.
• The Legislature rewrote the no-contest statutes to reduce uncertainty about what counts as a contest. Reviving a fact-based paper contest exception would bring back the uncertainty the Legislature tried to eliminate.

The father argued that this reading would create automatic forfeiture for any beneficiary who files a petition. The court disagreed and noted that a settlor who wants to protect beneficiaries who file and promptly withdraw a challenge can say so in the trust document. The court added that any remaining policy concern belongs with the Legislature.

Does Filing a Petition Automatically Mean a Beneficiary Forfeits an Inheritance?

No. Nelson removes one defense, but it does not create automatic forfeiture. The Court of Appeal sent the case back to the probate court to answer two questions that the trial court had skipped:

1. Was the father's petition a "contest" under section 21310 and the specific language of this trust's no-contest clause?
2. If so, is the clause enforceable under section 21311, which for a direct contest means deciding whether the father filed without probable cause?

Probable cause is often the decisive issue. Under section 21311, probable cause exists if, when the contest is filed, the facts known to the beneficiary would lead a reasonable person to believe there is a reasonable likelihood that the court will grant the requested relief after further investigation or discovery. The father in Nelson argued that he had probable cause, and the Court of Appeal expressly declined to decide that question.

For beneficiaries, the lesson is that forfeiture risk is fixed at the moment of filing. A later dismissal will not change what the beneficiary knew when the petition was filed, and it will not erase the filing. Nelson also confirms that a beneficiary who has already received a distribution may still face a demand to return it if a court later enforces the clause.

What Should Beneficiaries Do Before Challenging a California Trust?

If you believe a trust was signed under undue influence, while a loved one lacked capacity, or under other improper circumstances, your concerns may be legitimate. The key is to evaluate them carefully before anything is filed. Consider the following steps:

1. Obtain a complete copy of the trust and all amendments. A trustee must provide the trust terms to a beneficiary who requests them, and the no-contest clause may differ from one restatement to the next.
2. Read the no-contest clause closely. Identify which actions it covers and whether it expressly reaches property ownership challenges or creditor's claims.
3. Gather evidence before you file. Medical records, the drafting attorney's involvement, the timing of changes, and the people present when documents were signed all bear on probable cause.
4. Calendar your deadline. Under Probate Code section 16061.8, a beneficiary generally must contest a trust within 120 days after the trustee serves the required notice, or within 60 days after receiving a requested copy of the trust terms, whichever is later. Courts have held that a petition filed after this deadline may lack probable cause.
5. Consider alternatives that are not contests. A request for information, a demand for an accounting, or a petition concerning the trustee's administration generally does not attack the validity of the trust itself.
6. Do not use a petition as negotiating leverage. Nelson shows that filing a challenge during a separate dispute, then withdrawing it once that dispute settles, can still expose a beneficiary to forfeiture.

Because these issues turn on the exact wording of the trust and the facts available at the time of filing, a beneficiary should speak with an experienced California trust attorney before taking any action in court.

How Should Settlors Draft a No-Contest Clause After Nelson?

For people creating or amending a trust, Nelson highlights how much the wording of a no-contest clause matters. The court emphasized that the settlor's intent controls, and that a settlor may choose to exempt certain filings from the clause. When reviewing or drafting a no-contest clause, consider these questions with your attorney:

• Should the clause apply to a challenge that is filed and quickly withdrawn, or should it expressly exempt that situation?
• Should the clause extend to challenges over whether property belonged to the trust, or to creditor's claims? These applications require express language.
• Does the clause name the grounds for a direct contest clearly enough to withstand strict construction?
• Does every amendment and restatement carry the clause forward, or refer back to it, so that it protects the current version of the plan?
• Does the rest of the estate plan, including beneficiary designations and gifts outside the trust, align with the clause's purpose?

A no-contest clause works best when it is paired with good planning practices, such as documenting capacity at signing, using independent counsel, and explaining significant changes to family members where appropriate. These steps make a later challenge less likely to succeed and less likely to be filed at all.

Protecting Your Inheritance and Your Estate Plan After Nelson v. Nelson

Nelson v. Nelson makes clear that, for trusts governed by California's current no-contest statutes, filing a challenge is the act that matters. Withdrawing a petition days later will not by itself prevent a court from enforcing a California no-contest clause. Beneficiaries should evaluate probable cause, deadlines, and non-contest alternatives before filing anything. Settlors should review their no-contest clauses to confirm that the language reflects exactly the protection they intend.

Huber Law Group advises California beneficiaries, trustees, and families on trust administration, trust disputes, and estate planning. Contact us to schedule a no-cost consultation to discuss your rights as a beneficiary or to review the no-contest clause in your own trust.

Frequently Asked Questions

Q: What is a "paper contest" in California probate law?

A: A paper contest was a concept from a 1909 California Supreme Court decision describing a challenge that was filed and then abandoned without further action. Some courts treated a paper contest as too minor to trigger a no-contest clause. In Nelson v. Nelson (2026), the Court of Appeal held that this exception does not apply to trusts governed by California's current no-contest statutes, Probate Code sections 21310 through 21315.

Q: If I dismiss my petition, can a no-contest clause still be enforced against me?

A: Yes, dismissing a petition does not automatically protect you from a no-contest clause. Under Probate Code section 21310, a contest occurs when a beneficiary files a covered pleading with the court. A court will still decide whether your petition falls within the clause and, for a direct contest, whether you filed it without probable cause. If the clause is enforced, you may forfeit your gift or be required to return a distribution.

Q: Is a no-contest clause enforceable if I had good reason to challenge the trust?

A: Not for a direct contest brought with probable cause. California law enforces a no-contest clause against a direct contest only if the beneficiary lacked probable cause. Probable cause exists when the facts known at the time of filing would lead a reasonable person to believe there is a reasonable likelihood that the court will grant the requested relief after further investigation or discovery.

Q: How long do I have to contest a trust in California?

A: A beneficiary generally has 120 days after the trustee serves the notice required by Probate Code section 16061.7, or 60 days after receiving a requested copy of the trust terms, whichever is later. Missing this deadline can bar the challenge entirely, and a late filing may also undermine a probable cause defense if the trust contains a no-contest clause.

Q: Can a settlor allow beneficiaries to withdraw a challenge without penalty?

A: Yes, a settlor may draft a no-contest clause that exempts challenges filed and promptly withdrawn, or that otherwise limits which actions the clause covers. The Court of Appeal in Nelson noted that the settlor's intent controls. Settlors who want this flexibility should work with an estate planning attorney to state it expressly in the trust and in each amendment or restatement.