Any fiduciary may compromise any liability due to or from him, provided that such compromise be ratified and approved by a court of competent jurisdiction, all parties in interest being before such court by proper process. When such compromise shall have been so ratified and approved, it shall be binding on all parties in interest before such court. Nothing contained in this section shall affect the right of indemnity or of contribution among the parties.
§ 8.01-425.How fiduciaries may compromise liabilities due to or from them.
Chapter 16. Compromises · Last amended 1977 · Last verified July 16, 2026
In one sentenceSection 8.01-425 lets a fiduciary compromise a liability owed to or by them, as long as a court of competent jurisdiction ratifies and approves the compromise with all interested parties properly before it, and preserves any right of indemnity or contribution among the parties once approved.
Full Text of § 8.01-425
Plain-English Summary
A fiduciary — an executor, trustee, guardian, or similar office-holder — often stands on both sides of money owed: sometimes owed to the estate or trust, sometimes owed by it. This section lets that fiduciary settle either kind of liability, but only with a court’s blessing. The compromise has to be ratified and approved by a court of competent jurisdiction, with every party in interest properly brought before that court through proper process.
Once a court ratifies and approves the compromise, it binds everyone who was a party in interest before that court. The section is careful to preserve one thing regardless: nothing about approving the compromise cuts off anyone’s separate right of indemnity or contribution among the parties.
Frequently Asked Questions
Can a fiduciary settle a debt owed to or by the estate or trust they administer?
Yes, but only if the compromise is ratified and approved by a court of competent jurisdiction, with all parties in interest properly before that court.
Who has to be involved for the court to approve the fiduciary’s compromise?
All parties in interest, brought before the court by proper process.
Is the fiduciary’s compromise binding once the court approves it?
Yes, it becomes binding on all parties in interest who were before the court.
Does approving the compromise affect anyone’s right to seek indemnity or contribution afterward?
No. The section states that nothing in it affects the right of indemnity or of contribution among the parties.
What kinds of fiduciaries does this section cover?
Any fiduciary, without limitation to a particular type such as executor, trustee, or guardian.
Amendment History
Code 1950, §§ 8-171, 8-173; 1977, c. 617.
Source & verification. Section text and amendment history are
reproduced verbatim from the Code of Virginia, published by the
Code of Virginia, Virginia Division of Legislative Automated Systems. Last verified July 16, 2026.
· Official source
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