The no contest provision usually refers to people who challenge the validity of the trust itself. Here, it doesn't look like your mom's husband is challenging the validity of the trust. He just doesn't like the decisions you are making. Your job as a trustee is to follow all the terms of the trust and exercise your best judgment in the interest of the beneficiaries.
If a trustee is breaching his duty, a beneficiary always has the right to sue the trustee. You may want to meet with an attorney to go over the trust and make sure that you are doing everything that the trust requires of you.
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I agree with Mr. Scott's answer - the no contest clause refers, in layman's terms, to a person who is not happy with what they got under the document. Questioning the decision making of the trustee is a different animal. A trustee can always be brought into court to answer for their actions. If you are fearing an issue, and you don't already have a lawyer, hire one to advise you so you know you have the best advice and protection (and paper trail, etc.) for your actions.
This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/
Google California Probate Code section 21310. Also 21311, 21312, 21313, 21314, and do not forget 21315. California no-contest law changed significanly in the year 2010.
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