Family Settlement Agreements

Have you ever known families engaged in will contests because (a) the will is believed to be a forgery; (b) the testator of the will was not of sound mind at the time he executed it; or (c) the testator was unduly influenced or coerced into signing the will? Or perhaps the will was not signed properly or in the presence of qualified attesting witnesses? Many folks think that a will either stands or falls upon its face and no compromise can be achieved absent a judgment of a court of law. However, Georgia law provides a statutory mechanism for parties, including a decedent’s heirs at law, or the beneficiaries of a will, who are engaged in a contest over the validity of a will, to agree among themselves to distribute or divide the decedent’s property devised under a will, in lieu of that manner provided by the will. Entering into such an agreement may be beneficial, instead of risking an outcome in litigation that may be contrary to parties’ reasonable and best interests. Provided the proper statutory procedures are followed, such agreements among heirs at law or beneficiaries of a will are valid and enforceable and should be approved by the court.

O.C.G.A. §53-5-25 provides that “[a]pproval of any settlement agreement that provides for the sustaining of the caveat or the disposition of the property contrary to the terms of the will shall be after a hearing, at which evidence is introduced and at which the court finds as a matter of fact that there is a bona fide contest or controversy.” Notice of such hearing must be provided in the manner so directed by the court.

All individuals affected by the settlement agreement who are sui juris (adults) are authorized to enter into such agreement. The agreement is to be assented to in writing by all the heirs of the testator and by all sui juris beneficiaries affected by the settlement. All individual beneficiaries or heirs who are not sui juris or are unborn or unknown are to be represented in the settlement proceedings by an independent guardian ad litem. It is the duty of the guardian ad litem to investigate the proposed settlement and report to the court the guardian’s findings and recommendations, which the court may take into consideration in approving the settlement.

The court’s judgment based upon the settlement agreement will bind all parties, including those persons not sui juris, unborn beneficiaries, and persons unknown who are represented before the court by a guardian ad litem.

Family settlement agreements are contractual in nature and are governed by the rules applicable to contracts. The consideration for such an agreement is the termination of controversy among the heirs/beneficiaries, and is supported by the public policy of furthering family harmony and avoiding lengthy litigation. See Bradley v. Bradley, 225 Ga. App. 530 (1997).