Trusts and Nonjudicial Settlement Agreements

The law encourages parties and litigants to resolve disputes outside of court. To that end, Missouri’s Trust laws permit the creation of nonjudicial settlement agreements “with respect to any matter involving a trust.” Section 456.1-111.2, RSMo. There are at least two important qualifications to nonjudicial settlement agreements involving a trust.

First, all “interested persons” — eg, trustees, beneficiaries — must enter into the agreement. The agreement is likely unenforceable if not all interested persons have assented. Second, such an agreement is only enforceable to the extent it does not “violate a material purpose of the trust.” Section 456.1-111.3, RSMo.

As of this writing, little to no cases in Missouri exist interpreting or construing this statute. Accordingly, it will be up to future cases to determine the precise scope of nonjudicial settlement agreements and what constitutes a “material purpose” in a given trust instrument.

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