(1) A settlement of any controversy as to the administration of a trust; the construction, validity, or effect of any trust; or the rights or interests of the beneficiaries or persons having claims against a trust, if approved in a formal proceeding in the court for that purpose, is binding on all parties thereto, including an unborn individual, an unascertained individual, or a person who could not be located. An approved settlement does not impair the rights of creditors or taxing authorities who are not parties to it. (2) Notice of a judicially approved settlement must be given to every interested person or to one who can bind an interested person as provided in this code. (3) The procedure for securing court approval of a settlement is as follows: (a) The terms of the settlement must be set forth in an agreement in writing, which must be executed by all competent persons and parents of any minor child having a beneficial interest or having claims that will or may be affected by the settlement. Execution is not required by any person whose identity or whereabouts are unknown and cannot be reasonably ascertained. (b) Any interested person, including a trustee, then may submit the settlement to the court for its approval and for execution by the trustee, the trustee of every affected testamentary trust, other fiduciaries, and representatives. (c) After notice to all interested persons or their representatives, the court, if it finds that the contest or controversy is in good faith and that the effect of the settlement upon the interests of the persons represented by the fiduciaries or representatives is just and reasonable, shall make an order approving the settlement and directing all fiduciaries under its supervision to execute the agreement. A minor child represented only by his or her parents may be bound only if there is no conflict of interest between the parent and the child. Upon the making of the order and the execution of the settlement, all further disposition of trust property affected by the settlement must be in accordance with the terms of the settlement. (4) Notice to a person who may be represented and bound pursuant to this code of an agreement to be approved by the court must be given: (a) Directly to the person or to one who may bind the person if the person may be represented and bound pursuant to section 15-5-302 or 15-5-303; or (b) In the case of a person who may be represented and bound pursuant to section 15-5- 304 and who is unborn or whose identity or location is unknown and not reasonably ascertainable, to all persons whose interests in the judicial proceedings are substantially identical and whose identities and locations are known; or, in the case of other persons who may be represented and bound pursuant to section 15-5-304, directly to the person.
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