Trust administration does not always unfold exactly as the grantor envisioned. Changes in family dynamics, tax laws, beneficiary needs, or financial circumstances can expose ambiguities or inefficiencies in even the most carefully drafted trust. In Massachusetts, trustees and beneficiaries facing these challenges often assume that court involvement is inevitable.

In many cases, it is not.

Massachusetts law permits the use of Non-Judicial Settlement Agreements (NJSAs) as a flexible, efficient alternative to court proceedings for resolving certain trust-related issues. When used appropriately, NJSAs can preserve the grantor’s intent, reduce costs, and avoid the emotional toll of litigation—while still complying with fiduciary duties and statutory requirements.

This article explores how NJSAs function under Massachusetts law, the substantive issues they can address, their limitations, and best practices for trustees and beneficiaries considering their use.

What Is a Non-Judicial Settlement Agreement?

A Non-Judicial Settlement Agreement is a written agreement entered into by all interested parties to resolve any matters involving a trust—without court approval—as long as the agreement does not violate the trust’s material purpose or applicable law.

In Massachusetts, NJSAs are authorized under the Massachusetts Uniform Trust Code (MUTC). The statute reflects a policy preference for private resolution of trust matters where consensus is possible and judicial oversight is unnecessary.

Unlike court petitions, NJSAs are collaborative rather than adversarial. They allow trustees and beneficiaries to address problems pragmatically, provided that:

• All required parties consent, and
• The agreement respects the core intent and purpose of the trust.

Substantive Uses of NJSAs in Massachusetts Trust Administration

Modifying and Clarifying Trust Terms

One common use of an NJSA is to address ambiguities or gaps in trust documents. Even well-drafted trusts can contain provisions that are unclear, incomplete, or outdated when applied to real-world circumstances.

In Massachusetts, NJSAs may be used to:

• Interpret or clarify ambiguous trust provisions
• Add context where the trust document is silent on a particular administrative issue
• Correct drafting errors that frustrate trust administration
• Alter, supplement, or modify certain terms of an irrevocable trust, so long as the material purpose is preserved

These modifications can be especially valuable when ambiguity would otherwise force a trustee to seek court instructions.

Promoting the Trust’s Original Purpose When Circumstances Change

Trusts are often intended to function for decades. Over time, unforeseen events—changes in family structure, beneficiary health, financial conditions, or tax laws—can make literal compliance with trust terms impractical or counterproductive.

An NJSA may be used to:

• Promote the trust’s original intent when current circumstances hinder proper performance
• Update administrative provisions to reflect the evolution of the parties’ lives
• Adapt trust operations to new factual realities without undermining the trust’s purpose

Massachusetts law recognizes that flexibility can be essential to honoring the grantor’s broader objectives.

Resolving Trustee and Beneficiary Disputes Without Litigation

Disputes among trustees or between trustees and beneficiaries are a common source of delay, expense, and emotional strain in trust administration. Litigation often exacerbates these problems rather than resolving them efficiently.

NJSAs can provide a constructive alternative by allowing parties to:

• Resolve disputes without court involvement
• Avoid the acrimony and rigidity of formal litigation
• Reach mutually acceptable outcomes while maintaining family or professional relationships

When consensus can be achieved, an NJSA often results in faster and less costly resolutions than contested court proceedings.

Improving Trust Administration and Reducing Costs

Administrative inefficiencies can drain trust assets and burden trustees. NJSAs may be used in Massachusetts to streamline trust administration and reduce unnecessary expense.

Common administrative uses include:

1. Changing administrative terms that no longer serve the trust efficiently
2. Dividing or merging trusts to simplify management
3. Providing direction regarding trustee compensation
4. Providing for the succession of trustees
5. Transferring the trust’s principal place of administration

These adjustments can significantly reduce administrative friction while remaining consistent with fiduciary obligations.

Strategic and Tax-Sensitive Planning Purposes

NJSAs may also support sophisticated planning objectives, provided they do not alter the trust’s material purpose.

Examples include:

• Implementing tax minimization strategies consistent with the trust’s intent
• Granting additional powers to a trustee to address changed circumstances
• Directing a trustee to refrain from a particular act that would be impractical or harmful

In Massachusetts, careful drafting and legal review are critical to ensure that these strategies withstand scrutiny.