Nathanson v. Nathanson
Facts: A commercial property owner transfers title to their property by deed as follows:
- two-thirds undivided interest to the owner and their first child as trustees of the family trust; and
- one-third undivided interest to the first child separately.
The property owner later wills the property to their second child’s testamentary trust. The will contains a no contest clause providing any beneficiary who asserts a separate property interest forfeits all interests under the will. On the owner’s death, the second child petitions for probate and the first child asserts a separate, one-third interest in the property as granted under the deed.
Claim: The second child of the testamentary trust seeks to prevent the first child from receiving any interest in the property, claiming the first child’s assertion of a separate interest violates the no contest clause in the will, forfeiting their interest in the property.
Counter claim: The first child claims their one-third interest in the property granted by deed is unconditional and unaffected by the will’s no contest clause since their interest was established separately and prior to the will, and the will only transfers the owner’s two-thirds interest in the property, not the first child’s one-third interest.
Holding: A California court of appeals holds the first child’s one-third interest is not forfeited by the no contest clause in the will since the previous transfer by deed prior to the will sufficiently establishes their separate interest in the property and, thus, only the owner’s two-thirds interest is transferred to the second child by the will and is subject to the no contest clause. [Nathanson v. Nathanson (November 3, 2016)_CA4th_]