The Tennessee Court of Appeals recently held that a trustee’s signature of brokerage account agreement containing a pre-dispute arbitration clause did not bind the trust’s minor beneficiary.

The Court held that an “all powers allowed by law” clause in the trust agreement did not authorize the Trustee to enter a pre-dispute arbitration agreement. Instead, another more specific clause providing the “Trustee may settle, by compromise, arbitration or otherwise any and all claims” limited the grant of that authority only to claims that have arisen. See Tenn. Code Ann. § 35-15-816(b)(14).

Gladden v. Cumberland Trust & Inv. Co., No E2015-00941-COA-R9 (Tenn. App., Knoxville March 24, 2016).