People involved in trusts could settle matters without court approval

People whose consent is required could sign binding agreements about trust matters without court approval. A trust holds property for others. Agreements could cover managing that property, changing trust terms, and ending the trust. The agreement must respect the trust’s main purposes and contain only terms a court could legally approve. Every person whose consent is required must sign, personally or through someone legally allowed to represent and bind them. A person whose consent is required may ask a court to approve the agreement. An agreement would take effect when all required parties have signed.

Approving a trust manager’s report through an out-of-court settlement would block potential claims that the report adequately discloses. The rule covers claims by people who receive trust benefits against the trustee—the person who manages the trust. The report must adequately disclose the existence of the potential claims. The person receiving trust benefits must approve the report through an agreement that meets the settlement requirements.

Courts would treat a trust creator’s consent as support for changing or ending an irrevocable trust, which normally cannot be revoked. The trust manager, creator, or a person receiving trust benefits could ask the court to change or end the trust. All people receiving trust benefits must consent under this court provision. The court may approve if keeping the existing terms is unnecessary for the trust’s main purposes or the reasons for changing them outweigh those purposes. The creator’s consent would support an assumption that both grounds are met. That assumption could be challenged, and court approval would remain discretionary. These court rules would apply only to trusts created on or after the act’s effective date. The act would take effect immediately if enacted.