In this article we explain family settlement agreements for Illinois probate litigation and trust disputes. A family settlement agreement can be used to resolve ambiguities within a trust or will in order to avoid tension between family members and costly litigation. We will answer the questions, “what is a family settlement agreement in Illinois probate or trust cases?” and “what can family settlement agreements in probate or trust cases resolve?”
What is a family settlement agreement in Illinois probate or trust cases?
A family settlement agreement is an agreement between beneficiaries of a trust or will that have a genuine dispute over a provision of the trust or will. The agreement can be used to adjust or clarify a provision of the trust or will. The agreement must be signed by all interested in parties, but it does not have to be filed in court.
What can family settlement agreements in probate or trust cases resolve?
So far, this is pretty straightforward. Settlement agreements happen all the time in litigation. Generally, parties to a dispute can agree to a broad range of terms and the agreement will be upheld so long as it meets the requirements to be a valid contract. However, family settlement agreements in probate or trust cases must not only be agreeable to the interested parties, but must also respect the wishes of the creator of the trust or the will (the “testator”). For this reason, there are some limitations on what can be resolved through a family settlement agreement.
Family settlement agreements cannot be entered into for the sole purpose of changing the will or trust creator’s (the "testator") wishes as to how the estate’s assets will be managed or distributed. There must be a genuine dispute as to the testator’s intent that the agreement resolves. This genuine dispute provides the consideration that is required to make the contract valid. If the estate executor, administrator is not sure that this requirement is met, he or she should seek court approval of the agreement before distributing assets.
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