So-called "alternative dispute resolution" forums, such as mediation and arbitration, have gained popularity in recent years. Generally speaking, the idea behind such practices is that they help avoid the time and expense of prolonged litigation about certain issues. Often, these forums come into play when disputes arise over issues that the parties have previously agreed will be subject to the alternative type of resolution. In certain instances, however, arbitration may be made mandatory in an estate planning context.
The main objective of a will or trust document is to give effect to the testator's wishes with regard to distributing the assets of his or her estate. When conflicts arise in this context, they often turn out to be difficult to resolve without lengthy litigation, because of the emotional issues that are intertwined with the financial and legal ones. To this end, in 2007, Florida became the first state to pass a statute specifically stating that mandatory arbitration clauses contained in wills and trusts are enforceable, as long as the dispute is not about the validity of all or a part of the will or trust. This gives the testator the option to remove many potential objections from the trial context, and, hopefully, save some of assets of the estate from the fees normally associated with such litigation.
Whether or not such a clause is right for any individual, however, can be a complicated question. Anyone contemplating writing a will or completing a trust document may want to explore all the legal options before settling on a plan.
Estate planning documents must follow certain procedures to be enforceable, and it is important to get them right if one is to ensure that one's wishes are given effect. Further, everyone who finds themselves involved in a dispute over a family member's estate should seriously consider speaking with an experienced legal practitioner to determine the best course of action.
Source: Wealth Management, "Enforceability of Mandatory Arbitration Provisions in Trust Agreements," John T. Brooks & Jena L. Levin, Dec. 30, 2013