Withdrawing a Trust Contest Does Not Undo It: The No Contest Clause After Nelson v. Nelson

A father receives $375,000 from his late son's trust. Four years later, in the middle of a separate fight with his son's widow over life insurance money, he files a petition claiming the trust was procured by fraud and undue influence. A week later the life insurance case settles, and he dismisses the petition. The widow never responded to it and never attended a hearing on it.

Did he trigger the trust's no contest clause? The probate court said no. On September 30, 2026, the Court of Appeal said the probate court was wrong, and that the answer to whether a withdrawn trust contest counts under a California no contest clause turns on one fact: the filing.

The case is Nelson v. Nelson (Sept. 30, 2026, A159271, A160751), from the First Appellate District, Division Three, and it is certified for publication. For anyone who has ever thought about filing a contest to see what happens, it changes the calculation.

What a no contest clause does

A no contest clause is a provision in a trust or will that disinherits a beneficiary who challenges the instrument. Our Supreme Court described it in Donkin v. Donkin (2013) 58 Cal.4th 412 as a disinheritance device: if a beneficiary contests or seeks to invalidate the trust, the beneficiary forfeits the gift the trust provides.

California enforces these clauses narrowly. Since January 1, 2010, the rules have been set by statute in Probate Code sections 21310 through 21315. Section 21311 says a no contest clause "shall only be enforced" against three things:

• A direct contest brought without probable cause. Section 21310 defines a direct contest as one alleging the instrument or any of its terms is invalid because of forgery, lack of due execution, lack of capacity, menace, duress, fraud or undue influence, revocation, or a statutory disqualification of a beneficiary.
• A pleading challenging a transfer of property on the ground that the property did not belong to the transferor, but only if the clause expressly reaches that.
• A creditor's claim, or an action prosecuting one, again only if the clause expressly says so.

Section 21312 adds that the clause is strictly construed, and section 21314 says the statutory rules apply notwithstanding anything to the contrary in the instrument. So a drafter cannot write around them.

What happened in Nelson

Ron Jr. and Joanna Nelson restated their family trust in December 2013. The restatement gave a special cash gift of $375,000 to Ron Jr.'s father, Ronald Nelson, Sr., and another $375,000 in trust for Ron Jr.'s mother. It also contained a no contest clause: any beneficiary who, without probable cause, challenged the validity of the instrument on grounds including lack of capacity, duress, fraud, or undue influence would forfeit his or her bequest.

Ron Jr. died in January 2014, after a period in hospice care. The trust was administered, and his father received the $375,000. He also received proceeds of a life insurance policy on his son's life.

Around 2017, Joanna sued him for half of those insurance proceeds, claiming the policy had been paid for with community property funds. A mediation was set for February 13, 2018. A week before it, the father filed a petition to invalidate the December 2013 trust, alleging fraud, duress, and undue influence by Joanna and the drafting attorney, and that his son lacked capacity because he was heavily medicated when he signed. Joanna was served the day before the mediation. The petition was discussed at the mediation, which settled the insurance case with the father agreeing to pay Joanna $175,000. Both sides reserved their rights as to claims related to the petition. He dismissed it shortly afterward.

Joanna then petitioned to enforce the no contest clause and recover the $375,000. The probate court refused. Relying on Schwartz v. Schwartz (2008) 167 Cal.App.4th 733, it noted he had maintained the trust petition for only eight days, found it had been abandoned without action, and called it "much more of a 'paper contest'" than a real one.

Where the "paper contest" idea came from

The phrase traces to a 1909 Supreme Court case, Estate of Hite (1909) 155 Cal. 436. In Hite, two beneficiaries contested a will, then withdrew after the main beneficiary agreed to give them part of her share. The court enforced the no contest clause against one of them anyway, holding that anyone who uses the machinery of the law to thwart the testator's wishes, whether he succeeds or fails, has contested. In passing, it remarked that the mere filing of a paper contest, abandoned without action and never used to thwart the testator's wishes, need not be treated as a contest.

That remark was dicta, and Nelson says so. It also gave no test for telling a paper contest from a real one. Schwartz picked it up in 2008, but found no paper contest on its facts: the beneficiary there had litigated for a few months, through two hearings and settlement talks, before withdrawing. The probate court in Nelson read the line the other way. Eight days, no response, no hearing. Paper.

The statute counts the filing, not the follow through

Justice Fujisaki, writing for a unanimous panel, held that the paper contest exception does not apply to a no contest clause governed by the current statutes. The reasoning starts with the definition. Section 21310, subdivision (a) 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 no contest clause is enforced." The court took that to mean what it says, regardless of how far the beneficiary pushes the pleading through litigation.

The court found confirmation in a contrast inside section 21311 itself. For creditor's claims, the statute reaches both the "filing" of the claim and the "prosecution" of an action based on it. For everything else it speaks only of filing a pleading. The Legislature knew how to make a contest depend on pressing a case forward, and chose not to outside the creditor context.

The father argued that section 21313, which preserves the common law "to the extent this part does not apply," kept Hite alive. The court disagreed: the statutes did apply to this trust, and their definitions cover a petition that was filed and then dropped. In the opinion's words, the statutory language "leaves no wiggle room" for pleadings like his.

He also warned that the rule would mean automatic forfeiture for anyone who files. The court's answer was that it does not. The pleading still has to be one that would result in a penalty under the particular clause, and a settlor who wants to protect beneficiaries who file and quickly withdraw is free to write that exemption into the trust. Anything beyond that is a policy argument for the Legislature.

What Nelson did not decide

This is not a ruling that the father loses his $375,000. The court reversed and sent the case back so the probate court can decide two questions it skipped: whether his petition was a contest within the meaning of this clause and section 21310, and, if so, whether it was a direct contest brought without probable cause under section 21311. The court expressly declined to express a view on probable cause.

That matters because probable cause is now the whole defense. Section 21311, subdivision (b) says it exists if, at the time of filing, the facts known to the contestant would cause a reasonable person to believe there is a reasonable likelihood the requested relief will be granted after an opportunity for further investigation or discovery. Note the timing: at the time of filing. What a contestant learns, or decides, afterward does not change the measure.

The holding is also limited to clauses governed by the current statutes. Under section 21315, those statutes apply to any instrument that became irrevocable on or after January 1, 2001. For an older instrument, section 21313 sends the question back to the common law, and Nelson did not address whether the paper contest idea survives there.

The tactic this decision prices

Strip the facts down and Nelson describes a familiar move. One family member is in a dispute with another over money. A trust contest is filed shortly before a mediation, served the day before, discussed at the table, and dismissed once the other dispute settles. Whether or not that was the purpose here, a contest filed as leverage and withdrawn once it has done its work is exactly what the paper contest exception used to protect.

After Nelson, the protection is gone. The filing is the contest. If it was a direct contest and the filer lacked probable cause, the forfeiture is available whether the petition lived for eight days or eight months. The decision to file is the decision that counts, so the probable cause analysis has to happen before the petition goes in, not after.

What to do

1. If you are a beneficiary thinking about contesting. Read the clause first, closely, because section 21312 construes it strictly and its wording decides what it reaches. Then build the probable cause record before filing: medical records bearing on capacity, the drafting attorney's file, witnesses to the signing, and the circumstances of any amendment. Do not file to test the waters or to create pressure in another negotiation. And watch the clock, because a contest can be barred as little as 120 days after the trustee's notice.
2. If you have already filed and want to withdraw. Withdrawal no longer ends your exposure on its own. If you are settling, the settlement agreement should deal with the no contest clause expressly. In Nelson, the insurance settlement expressly reserved both sides' rights on claims related to the trust petition, and the widow then petitioned to enforce the clause. A settlement that is silent on the point invites the same fight.
3. If you are a trustee or another beneficiary facing a contest that was dropped. A dismissal is not the end of the analysis. Whether to pursue enforcement turns on whether the pleading was a direct contest and whether the filer had probable cause, and the trustee's duties to the other beneficiaries, discussed in our article on what fiduciary duties a trustee owes, bear on that decision.
4. If you are creating or updating a trust. Nelson points out that a settlor can protect beneficiaries who file a contest and promptly withdraw it. Whether you want that protection, or want the clause to apply with full force, is now a drafting choice worth making deliberately.

Not every petition is a contest. A petition to remove a trustee for mismanagement, or to compel an accounting, does not allege that the instrument is invalid, and so it is not a direct contest under section 21310. Challenges built on undue influence or capacity are, which is why those are the cases where the clause and the probable cause question carry the most weight.

Talk to a Los Angeles trust litigation attorney

The Darvish Firm's Los Angeles trust and estate litigation attorneys advise beneficiaries before they file a contest, represent trustees and beneficiaries in no contest clause enforcement proceedings, and litigate capacity and undue influence challenges to trusts and wills. Call (310) 677-3512 or request a consultation.

This article is general information about California law, not legal advice, and reading it does not create an attorney-client relationship. Every case depends on its facts. Consult an attorney about your specific situation.