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SB 500 - Currently, "no-contest" or "in terrorem" clauses are enforceable. These types of provisions in a trust or will generally provide that a beneficiary forfeits interest in the trust or will property if the beneficiary contests the trust or will. This act provides that when an irrevocable trust contains a no-contest clause, as defined in the act, then an interested person may still file a petition with a court for a ruling on whether a particular claim for relief would trigger forfeiture. The petition for such a ruling may be filed either as a separate judicial proceeding or along with other claims for relief. The act specifies that when ruling on the petition, the court shall consider the text of the clause, and the context of the terms of the trust and factual allegations in the petition. The court shall not accept evidence beyond what is provided in the pleadings and the trust instrument. The act states that the judgment on the application of a no-contest clause is appealable. Following the ruling, if claims are subsequently filed in which differing facts are asserted from those which the no-contest clause judgment was based upon, then the party in whose favor the judgment was rendered shall have no protection from enforcement of the no-contest clause provided under this act. The act also provides the types of circumstances in which a no-contest clause is not enforceable such as objections to venue or a claim for relief concerning an accounting error. In these situations the court may award attorneys' fees and costs. Similar to a trust, the act states that if a will contains a no-contest clause an interested person may file a petition with the court for determination on whether a court action would trigger the application of the no-contest clause or trigger forfeiture. JESSICA BAKER
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