9 www.loubar.org July / August 2026 The Zoppoth Law Firm anniversary th 30 as Kentucky’s Premier Boutique Business Litigation Law Firm Scott Zoppoth [email protected] Brad Zoppoth [email protected] Liz Mosler [email protected] zoplaw.com | 502.568.8884 is celebrating its Court Rules Questioning No-Contest Clause Triggers Violation: Lessons for Practitioners John R. Cummins and Gregory Neibarger A no-contest clause—also known as an “in terrorem clause”—is included in a will or trust to deter beneficiaries from challenging its terms. The penalties are harsh: the offending beneficiary may be deemed to have predeceased the grantor, resulting in disinheritance. A recent unpublished decision from the Minnesota Court of Appeals, In re the Gus A. Cha- foulias Revocable Trust (February 23, 2026), raises an important caution: even asking a court whether a particular action would violate a no-contest clause can itself trigger the clause. What Happened in the Chafoulias Case Gus Chafoulias created a revocable trust in 2005, restated in 2015 and amended in 2020. Upon Gus’ death in late 2020, the trust became irrevocable and named his son, Andrew, as sole trustee. Both Andrew and his sister, Ann, were residual beneficiaries. The trust included several provisions central to this dispute: • Trustee removal restrictions. Andrew could remove trustees at any time. Ann could only remove a trustee of her own discretionary trusts—and not if the trustee was Andrew. • Alternative dispute resolution preference. The trust directed administration “with freedom from judicial intervention,” provided for the use of alternative dispute reso- lution and appointed a “trust advisor” empowered to construe terms, settle disputes and remove trustees other than Andrew. • The no-contest clause. Article 16 provided that a beneficiary’s interest would be de- termined as if the beneficiary had predeceased Gus if that 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 [the trust] or any of its provisions.” Ann’s Grievances and Her Petitions After Gus’ death, Ann grew concerned about Andrew’s management. Andrew’s 2020 ac- counting disclosed nearly $17 million in unpaid loans he had taken from the trust, his 2021 inventory omitted valuable items and he gifted trust property to non-beneficiaries. As trustee of Ann’s discretionary trusts, Andrew made only a single distribution to Ann between 2020 and 2024. Ann initially filed a petition alleging breach of trustee duties and seeking to remove Andrew. She then filed an amended petition seeking declaratory relief on whether the no-contest clause was valid and whether a removal petition would trigger it. The district court ruled in Andrew’s favor, which the Minnesota Court of Appeals affirmed. The Court of Appeals’ Holdings 1. Asking the court to rule on a no-contest clause’s validity triggers it. The court interpreted the clause to be triggered whenever a beneficiary “presents a question of the validity of a provision to a judicial forum.” Ann’s amended petition— asking whether the no-contest clause was valid—squarely satisfied this condition. 2. The anti-forfeiture preference does not override grantor intent. Ann argued that Minnesota law disfavors forfeitures, which should lead to a narrower construction. The court acknowledged this principle but held that the “ultimate objec- tive to enforce grantor intent trumps this preference.” 3. The second declaratory-relief request also triggered the clause. The court also found that Ann’s request asking whether a removal petition would trigger the clause independently violated it, reading this as “an attempt to circumvent the trust provisions that establish Andrew as trustee.” Why This Decision Matters 1. A cautionary precedent, even if nonprecedential The Chafoulias decision is nonprecedential but significant. The reasoning reflects a trend toward a substance-over-form approach: if the practical effect of a beneficiary’s court filing is to challenge a trust provision, the court may find a violation regardless of how the filing is labeled. 2. Unique facts that shaped the outcome Several features of the trust likely influenced the outcome: explicit language favoring “freedom from judicial intervention,” alternative dispute resolution mechanisms, a trust advisor with authority to resolve disputes and Ann’s original direct removal petition before switching to declaratory relief. Practitioner Tips for Kentucky Lawyers While Chafoulias arises out of Minnesota, it may be instructive for Kentucky practitioners. Kentucky has not addressed this precise issue, and courts often look to persuasive authority from other jurisdictions, although this decision is expressly not precedential. When drafting trusts containing no-contest clauses in Kentucky: • Express the grantor’s intent comprehensively. Include clear language on preferred dispute resolution methods, the no-contest clause’s scope and any intended excep- tions. Kentucky’s trust statutes and common law emphasize honoring grantor intent. • Consider including carve-outs. Build specific safe harbors into the instrument—for example, permitting beneficiaries to petition for accountings or seek trustee removal without triggering the clause. • Appoint an independent trust advisor or trust protector. Kentucky recognizes trust protectors and advisors. This gives beneficiaries a path to raise concerns outside of court. When advising Kentucky beneficiaries considering a challenge: • Do not assume a “cautious” approach will provide protection. The Chafoulias court held that asking for a declaratory judgment can itself constitute a violation. Conceivably Kentucky courts could adopt similar reasoning. • Exhaust all non-judicial remedies first. Where the trust pro- vides for mediation, arbitration or a trust advisor, pursue those avenues before considering court action. • Research state-specific precedent. Kentucky has limited case law on no-contest clauses in trusts. Monitor developments and advise clients of the uncertainty. Partner John R. Cummins is a member of Dentons’ Trusts, Estates and Wealth Preservation group, based in the Louisville office. Greg Neibarger is co-chair of Dentons’ Fiduciary Litigation practice group and based in the Indianapolis office. n PROFESSIONAL EXCELLENCE Cummins Neibarger
