Boyle v. Anderson (Va. April 14, 2022)
A while back, we covered a Fairfax Circuit Court decision, which answered the question is a trust agreement a contract? The court held it was not. Now, from the Virginia Supreme Court, another look at the question . . .
A man creates a trust. The trust instrument contains an arbitration clause. After he dies, the man’s widow sues the trustee in court. The trustee moves to compel arbitration. Must the widow arbitrate the dispute?
Trust instruments are not contracts. Contracts require mutual assent of the parties. Trust instruments do not—they are unilaterally created by the settlor for the beneficiaries. And because trust instruments are not contracts with the beneficiaries, they cannot be enforced against the beneficiaries. So here, the widow cannot be compelled to arbitrate her dispute with the trustee.