In Re the Shaheen Trust
236 Ariz. 498
| Ariz. Ct. App. | 2015Background
- The Shaheen Trust (1994) includes a no-contest provision: contesting a trust disposition revokes the beneficiary’s share.
- Twinkle Shaheen (as trustee) and the Shaheen Trust are challenged by the Robertses, beneficiaries, via a petition alleging multiple breaches of trust.
- Shaheen counters seeking attorney’s fees and forfeiture of the Robertses’ interests; the trial court denies forfeiture but awards costs/fees to Shaheen.
- The trial court concluded the Robertses’ petition violated the no-contest provision, but held the forfeiture provision unenforceable under Shumway.
- Arizona courts rely on Shumway for wills and on Stewart for trusts, with Restatement guidance filling gaps; the trial court deemed Shumway applicable absent statutory authority for trusts.
- The court of appeals reverses in part, holds probable cause is required for each challenge, and remands for entry of a forfeiture order against the Robertses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of a trust no-contest provision | Shaheen: § 14-2517 applies to wills only; trusts follow Restatement guidance, so no-contest clause is enforceable regardless of probable cause. | Robertses: controlling authority for trusts requires consideration of public policy and lack of automatic enforcement without probable cause. | Probable cause framework governs enforceability; the clause can be enforced if probable cause is lacking for each challenge. |
| Probable cause required for each challenge | Shaheen: fewer challenges could be protected if any had probable cause; overall petition may be treated as multiple challenges. | Robertses: a single petition with multiple claims may rely on a common probable cause showing. | Probable cause must exist for each individual challenge within a petition. |
| Scope of probable cause for multiple claims in one petition | Shaheen: applying the standard to each claim prevents coercive litigation and aligns with policy concerns noted in Shumway. | Robertses: a single petition can be supported by a shared factual basis. | A separate probable cause determination is required for each claim asserted. |
| Impact on forfeiture remedy | Shaheen: if any claim lacks probable cause, forfeiture should attach to the Robertses’ interests. | Robertses: forfeiture should only apply where the applicable standard is satisfied for each claim. | Because any claim lacking probable cause defeats forfeiture for that claim, the trial court erred in not forfeiting. |
Key Cases Cited
- In re Estate of Shumway, 198 Ariz. 323 (2000) (invalidated no-contest provisions in wills absent probable cause)
- In re Estate of Stewart, 230 Ariz. 480 (App. 2012) (applies Restatement approach to trusts; § 14-2517 inapplicable to trusts)
- Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411 (1988) (probable cause-like standard for malice-like contexts)
- Herbst (In re Herbst), 206 Ariz. 214 (App. 2003) (Restatement-guided approach to donative transfers (trusts) when contrary authority is absent)