When beneficiaries disagree in Tennessee: the terms, the court and the settlement agreement

The terms come first — with limits

The terms of the trust prevail over the code except for the rules Tenn. Code Ann. § 35-15-105(b) lists — among them the requirements for creating a trust, the duty to act in good faith and in accordance with the terms and purposes, the court's powers to modify or terminate a trust and to adjust compensation, the effect of an exculpatory term, the rights of third persons and the periods of limitation. A discretionary interest is a mere expectancy, reviewed only for dishonesty, improper motive or failure to act (Tenn. Code Ann. § 35-15-814(b)).

The nonjudicial settlement agreement

The trustee and the qualified beneficiaries may enter into a binding nonjudicial settlement agreement with respect to any matter involving the trust, valid to the extent it does not violate a material purpose of the trust and includes terms a court could properly approve (Tenn. Code Ann. § 35-15-111(a), (b)); the matters it may resolve include the interpretation or construction of the terms, the approval of a trustee's report or accounting, direction to a trustee to refrain from an act or the grant of a necessary power, a trustee's resignation or appointment and compensation, the transfer of the principal place of administration, a trustee's liability and the other matters the section lists ((c)); any interested person may ask the court to approve it ((d)).

The court, removal and the limitation

A trust is not under continuing judicial supervision unless the court orders it, but a judicial proceeding may relate to any matter involving the administration, including a request for instructions and an action to declare rights (Tenn. Code Ann. § 35-15-201); the chancery court of the county, or another court of record with probate jurisdiction, hears it (Tenn. Code Ann. § 35-15-203). The settlor, a cotrustee or a qualified beneficiary may ask the court to remove a trustee, and the court may act on its own initiative — for a serious breach of trust, a lack of cooperation among cotrustees that substantially impairs the administration, unfitness, unwillingness or persistent failure to administer effectively, or a substantial change of circumstances or the request of all qualified beneficiaries with a suitable successor available (Tenn. Code Ann. § 35-15-706). A beneficiary's claim for breach is brought within one year after adequate disclosure or actual knowledge, or three years otherwise (Tenn. Code Ann. § 35-15-1005).

Законы, дословно

• Limitation of action for breach of trust

  Tenn. Code Ann. § 35-15-1005 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Default and mandatory rules

  Tenn. Code Ann. § 35-15-105 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Nonjudicial settlement agreements

  Tenn. Code Ann. § 35-15-111 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

• Removal of trustee

  Tenn. Code Ann. § 35-15-706 ↗

  Понятное простое объяснение; дословный текст статута ещё не заверен в нашей библиотеке. Смотрите официальный статут по ссылке выше.

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