3. Settlement Can Be a Good Way To Resolve Issues if the Pertinent Parties Are Included In an unpublished case from the Nebraska Court of Appeals, the appellate court affirmed the trial court’s finding that parties’ signatures on a family settlement agreement concerning their parents’ trusts was also a resolution regarding amendments made to a sibling’s special needs trust. In re Trust of Wegener, Case. No. A-22-012, 2023 WL 192804 (Jan. 17, 2023) (unpublished). Specifically, the father changed the named trustee for one son’s special needs trust through some amendments, which all of the interested persons (namely, the other siblings who were successor trustees) did not sign. However, those siblings did sign a family settlement agreement approved by the court in 2016, which referenced the amendments previously made to the special needs trust. Ultimately, the court found that these later signatures served to ratify the earlier amendments to the special needs trust. The court rejected the objecting siblings’ arguments that the 2016 family settlement agreement was about their parents’ trust and not their sibling’s special needs trust. Therefore, a family settlement agreement could be used to resolve possible issues regarding a trust and even other related matters — depending on the terms of that agreement. The Probate Code has a similar provision regarding court approval of compromises in estate disputes. The Nebraska Supreme Court decided in April 2023 that the trial court improperly approved a compromise between all siblings, except one. In re Estate of Ryan, 313 Neb. 970 (2023). The court explained that, even after taking evidence and presumably considering the objections of the sibling, the objecting sibling was “not protected” in the proceeding and so the dismissal based upon the compromise between the other siblings was improper. Id. This was even though the objecting sibling was not a beneficiary of the will initially sought to be probated. Although the forgoing case concerns the probate code, and not the trust code, the lessons still apply — namely, to ensure that all parties’ interests are protected and that all agree to the resolution reached. Lesson: Settlement can be an excellent way to resolve matters (even without significant litigation), but be sure that all parties are represented and the language of the proposed agreement is clear. 15 NEBRASKA BANKER
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