No-Contest Clause Triggered by Declaratory Relief Petition

Trust Law Controversies

No-Contest Clause Triggered by Declaratory Relief Petition Seeking to Interpret Its Own Validity

Prepared March 15, 2026

Court: Court of Appeals of Minnesota

Date: February 23, 2026

Citation: In re The Gus A. Chafoulias Revocable Trust, No. A25-0665, 2026 WL 493295 (Minn. Ct. App. Feb. 23, 2026)

Summary of Relevant Facts

Gus Chafoulias created a revocable trust in 2005, restated it in 2015 naming his son Andrew as co-trustee, and amended it in 2020. After Gus died in late 2020, his daughter Ann became suspicious of Andrew’s management. Andrew’s 2020 accounting revealed he had taken nearly $17 million in loans from the trust without repayment. His 2021 inventory of Gus’s personal property omitted gold bars and valuable artworks. Andrew gifted trust property to non-beneficiaries, and despite Ann’s declining income and loss of health insurance, Andrew made only a single distribution to her discretionary trust between 2020 and 2024. The trust instrument contained a no-contest clause providing forfeiture if a beneficiary sought adjudication that any trust provision was void or otherwise sought to nullify or set aside a provision. The trust also contained provisions establishing Andrew as trustee and barring Ann from removing him, along with mechanisms for a trust advisor and alternative dispute resolution reflecting Gus’s preference for keeping disputes out of court.

Procedural Background

Ann filed an initial petition alleging breach of trustee duties and requesting Andrew’s removal. She then amended the petition to instead request declaratory relief on two questions: (1) whether the no-contest clause was valid and enforceable, and (2) whether a petition to remove Andrew as trustee would trigger the clause. Andrew moved for judgment on the pleadings, arguing both requests triggered the no-contest clause. The district court granted Andrew’s motion, finding the clause was unambiguously triggered. Ann appealed.

Main Controversies

The central controversy was whether the trust’s no-contest clause was triggered when a beneficiary filed a petition for declaratory relief asking a court to determine the validity and enforceability of the no-contest clause itself. A secondary issue was whether the probable-cause exception to no-contest clauses—established in Minnesota’s will-contest jurisprudence—should be extended to trust disputes under the Minnesota Uniform Trust Code.

Position of the Parties

Ann argued that seeking a judicial interpretation of the no-contest clause’s enforceability was not the same as seeking to void a trust provision, and that the probable-cause exception from will contests should be imported into trust law under Minnesota Statutes sections 501C.0112 and 501C.0106. Andrew argued that both petitions triggered the no-contest clause—the first by seeking to nullify the clause, and the second by attempting to circumvent provisions establishing him as trustee.

Holding or Decision

The Court of Appeals affirmed judgment on the pleadings against Ann, holding that the no-contest clause was triggered. A beneficiary who presents a question of a trust provision’s validity to a judicial forum satisfies the clause’s condition precedent. The court further held that the probable-cause exception does not apply to trusts under existing Minnesota law.

Reasons for the Decision

The court reasoned that the trust’s language was unambiguous: the clause is triggered whenever a beneficiary “seeks to obtain adjudication in any court proceeding that [the trust] or any of its provisions is void, or otherwise seeks to void, nullify, or set aside” a provision. Asking a court to rule on whether the no-contest clause is valid and enforceable falls squarely within that language. The court found that Gus’s intent to maintain freedom from judicial intervention was reinforced by the trust’s ADR procedures and trust-advisor mechanisms. On the probable-cause exception, the court distinguished between a “rule of construction” (which Section 501C.0112 imports into trust law) and a substantive exception to no-contest clauses (which Section 501C.0112 does not cover). The legislature codified the probable-cause exception in the “Wills” section of the Uniform Probate Code while creating separate “Rules of Construction” sections, demonstrating its conscious exclusion from trust law. The court declined to extend the exception through “principles of equity” under Section 501C.0106, holding such extension was for the legislature or supreme court.