Sometimes, disputes about trust agreements arise. Did you know that a trust agreement can include arbitration clauses? Arbitration allows resolution of disputes outside of a courtroom. It differs from mediation as the arbitrator decides the outcome of the dispute whereas a mediator facilitates the finding of a mutually acceptable solution if possible. While you can include an arbitration clause in a trust agreement, should you?
There may be a variety of reasons why including an arbitration clause in a trust agreement may be preferred. One such reason may be that, while court proceedings would be a matter of public record, arbitration is a private means of resolving a dispute. Furthermore, parties to an arbitration may have more control over the process than they would if the dispute went to court. The rules of the arbitration can be selected, as can the arbitrator of the dispute.
On the other hand, however, there can be potential drawbacks for arbitration clauses in trust agreements. Courts have a history of handling disputes regarding trust agreements and other estate planning documents. This experience may be helpful in seeking resolution of the dispute. This, however, can be helped by retaining the counsel of a knowledgeable and experienced trusts and estates attorney. Additionally, court intervention may still happen in the arbitration process should a judge intervene. This type of intervention may result in more time delays and expenses incurred by the parties.
To find out whether you should include an arbitration clause in your trust agreement, please give us a call to schedule a time to meet.