In Donkin v. Donkin, spouses Mary and Rodney Donkin (settlors), created a revocable trust on August 15, 1988. The primary beneficiaries of the trust were the settlors' children Rodney Donkin Jr., Lisa Kim, and Annemarie Donkin.
After Rodney Sr.'s death in 2002, Mary made a second amendment to the Trust. The second amendment gave the Trustees "complete discretion" whether to keep the assets of the trust estate intact or to continue to manage or distribute them for the equal benefit of the beneficiaries. The second amendment also added a no contest clause stating that any beneficiary, who directly or indirectly challenges the trust or any of its provisions, would forfeit their right to any inheritance under the trust.
After Mary's death in 2005, Rodney Jr. and his wife Vicki Donkin became the successor trustees. In 2008, Lisa and Annemarie filed a "safe harbor" petition under former section 21320 which was the law in effect at the time to determine whether the filing of their proposed motion to compel a proper accounting from the successor Trustees, reduce the compensation of the successor trustees, remove Rodney Jr. and Vicki as trustees, and to compel distribution of a portion of the trust assets would violate the no contest clause of the trust. However, while Lisa and Annemarie's petition was still pending, the Probate Code was amended in 2010 removing the safe harbor provisions.
In 2010, the trial court, without making a finding whether the former law applied, concluded that Lisa and Annemarie's petition to compel a proper accounting and seeking other relief did not constitute a contest under the terms of the trust's no contest clause. The trustees appealed.
Stay tuned for more on this topic on subsequent blog.
*This blog entry was not written by an Attorney and should not be construed as professional legal advice.