Are estate and trust settlement agreements binding?
Key takeaway
Estate and trust settlement agreements are generally binding, and states set the rules for how. Georgia allows a binding nonjudicial settlement agreement on any will-related matter. Colorado treats a trust settlement approved in a formal court proceeding as binding on all parties. Florida courts favor mediated settlements and enforce them.
Georgia
Georgia law allows the nominated or qualified personal representative and all affected persons to enter a binding nonjudicial settlement agreement on any will-related matter.
Entering into a will settlement agreement, or petitioning a court about it, is not a violation of an in terrorem condition. The same applies to a nonjudicial settlement agreement under the relevant Code section.
Colorado
A trust settlement approved in a formal Colorado court proceeding binds all parties, including unborn and unlocatable persons. It does not impair the rights of non-party creditors or taxing authorities.
Florida
A Florida appeals court held that fatigue, distress and later second thoughts, without more, were not enough to set aside a mediated settlement agreement.
The court said mediation and settlement of family disputes is highly favored in Florida. Section 733.815 reflects that preference by letting interested persons agree among themselves, in a written contract, to alter their interests.