Arbitration Of Trust Disputes PDF Download

The American Arbitration Association (AAA) first promulgated rules specific to wills and trusts arbitration in July 2003. The AAA subsequently has amended those rules several times, most recently in June 2012. This chapter focuses on the AAA's June 2012 Wills and Trusts Arbitration Rules. The Introduction to the AAA Wills and Trusts Arbitration Rules points out that every year the executors of estates and the trustees of family trusts, charitable trusts, and commercial trusts administer billions of dollars' worth of property with respect to the estates and trusts for which they serve as fiduciaries. Inevitably, disputes arise with respect to the administration of these estates and trusts and the interpretation of these wills and trust instruments. The Introduction posits that arbitration may be a suitable means for resolution of these disputes “privately, promptly, and economically, utilizing as the arbitrator a lawyer or lawyers with substantial experience in the area of wills, trusts and estates.” Implicit in the touting of these virtues of arbitration by the drafters of the AAA Wills and Trusts Arbitration Rules is the understanding that the drafters sought to promulgate rules for administering wills and trusts arbitrations that would maximize these benefits of arbitration. Moreover, implicit in the very concept of arbitration rules specific to wills and trusts arbitrations is the expectation that the drafters would consider the nature of will and trust disputes in promulgating such specialized arbitration rules and would seek to promulgate rules complementary to this nature. This chapter evaluates the AAA Wills and Trusts Arbitration Rules in light of these goals that presumably were at the center of this pioneering effort to craft rules specific to the arbitration of will and trust disputes and therefore considers the extent to which the Rules promote the private, expeditious, cost-effective, and expert resolution of will and trust disputes. The chapter finds the Rules wanting and suggests ways in which adopters might vary the procedures set forth in the Rules to better serve the interests of a testator, settlor, or parties arbitrating a will or trust dispute. The ability to contract around the oversights and shortcomings of the AAA Wills and Trusts Arbitration Rules, however, is not a panacea. Ad hoc drafting, especially when it is extensive, incurs the risk of litigation over the meaning of the customized provisions. Indeed, a presumed virtue of adopting an arbitral organization's rules of arbitration procedure is that the rules will have been utilized by others extensively over time and their meaning will have become settled. Thus, the AAA itself should form a study group to analyze the nature of will and trust disputes and to recommend arbitration procedures best suited to that particular nature. The AAA should then revise the AAA Wills and Trusts Arbitration Rules accordingly.