Non-judicial Settlement Agreements: Changing the Irrevocable

Over the past twenty years that I’ve been practicing law, not infrequently, a client has called to say, “You remember that irrevocable trust we set up?  Well, now I need to change it.”  Prior to the enactment of the Massachusetts Uniform Trust Code (MUTC) in 2012, the solution to this client’s issue would often be time consuming, quite expensive, and might have involved going to court.

Due to non-judicial settlement agreements, M.G.L. ch. 203E §111, I can now discuss with this same client the possibility of using a relatively simple agreement to deal with the unforeseen circumstance that has occurred.  As long as all of the parties involved concur, and provided that the situation does not call for affecting the material purpose of the Trust, a non-judicial settlement agreement is likely the answer.  This is a major departure from previous Massachusetts law.  Previously, only a court could change or terminate a trust, and, only under certain circumstances.  So, when I first learned about these agreements a few years ago, it seemed to me that they possessed some sort of magic trust powers.

Since that time, I have used non-judicial settlement agreements to add specific Trustee powers to enable the Trustee to engage in an originally unanticipated transaction; to deal with new rules imposed by financial institutions; to sell real estate from a trust that prohibited the sale, when the Grantor told me he never intended that prohibition; to update trustee succession language; and to change the dispositive language of a trust to take into account a disease/addiction/mental illness developed by a beneficiary.  All of these changes are now possible, provided they do not alter the material purposes of the trust.

Virtual representation, a new concept in Massachusetts that allows non-judicial settlement agreements to work, will be the topic of my next discussion.

About Tracy Craig

Tracy is a partner and chair of the firm's Trusts and Estates Group. She focuses her practice in estate planning, estate administration, prenuptial agreements, tax-exempt organizations, guardianships and conservatorships and elder law. Before joining Mirick O'Connell, she was counsel at Testa, Hurwitz & Thibeault LLP, in Boston.
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