Resolving Trust Disputes Without a Courtroom
Court proceedings are expensive and time-consuming. Arizona law offers a practical alternative: a nonjudicial settlement agreement. Interested persons connected to a trust can sit down and resolve issues on their own terms, as long as the agreement stays within certain limits.
Interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust.
A.R.S. § 14-10111(A)The statute lists several matters that can be handled this way: interpreting the trust language, approving a trustee's accounting, appointing or removing a trustee, setting trustee compensation, transferring the trust's principal place of administration, and settling claims about trustee liability. That covers a broad range of situations that might otherwise require a judge.
The Material Purpose Safeguard
There is an important limit. The agreement cannot override a material purpose of the trust. If the person who created the trust intended a specific outcome, the parties cannot simply agree to undo that intent.
A nonjudicial settlement agreement is valid only to the extent it does not violate a material purpose of the trust and includes terms and conditions that could be properly approved by the court under this chapter or other applicable law.
A.R.S. § 14-10111(B)Any interested person can also ask a court to review the agreement after the fact. The court can approve it, but if it declines, that does not automatically invalidate the agreement. The parties still have their deal. This flexible structure encourages cooperation while keeping the trust's core purpose intact.
