It is difficult to prepare for every contingency in life. This is also true for creating a trust. When it comes to money, not everyone will see eye-to-eye, and disputes can arise. Just like any other legal dispute, if a dispute arises over a trust it is always desirable to resolve it without the expense and burden of the court system.
In Nevada, as with many other states, a relatively new statute allows for all interested parties of a trust to resolve their differences by entering into a non-judicial settlement agreement (“NJSA”). In Nevada, an NJSA can be used to modify the terms of an otherwise irrevocable trust if all of the interested parties are in agreement. The agreement can cover a wide range of issues as long as it does not violate the “material purpose of the trust” and the agreement covers those issues that could “be properly approved by the court” if the matter were brought before the Nevada probate court.
Those matters that may be resolved by an NJSA include the investment or use of trust assets; the addition, deletion or modification of a trust term or condition; clarification of a trust term; to approve a Trustee’s accounting; to approve the action of a Trustee or prevent a Trustee from acting; the merger or division of trusts; or the termination of a trust, among many others.
It is often the case that a trust has become irrevocable and has outlived its intended purpose. If that is the case, the beneficiaries can get together and agree to terminate the trust. Again, this requires the consent of all “indispensable” parties. Nevada statute defines an indispensable party as an interested person; that is, a person whose right or interest under the trust may be materially affected by the action being taken.
There are often many times when the terms of the trust are not exactly clear in a given situation. Clarification is needed for the Trustees to know how to administer the trust properly. This, too, is a great situation in which to use a non-judicial settlement agreement.
Using the NJSA can save considerable time and money by allowing the parties to a trust to resolve whatever issues may arise concerning the trust without having to resort to court. If you think that an NJSA may be beneficial in a situation that has arisen regarding a trust in which you are involved, please feel free to call our firm for a free initial consultation to discuss how the matter might best be resolved.