Is an Arbitration Provision in a Will Enforceable?

Drafting a will gives a testator control over how their assets are distributed upon his or her death. In some cases, a person who seeks a greater level of control might place their property in a trust with detailed instructions regarding asset management and disposition. But when a person does bequeath assets through a will, how much power do they have to affect the probate process? 

Richard C. Harris drafted a will in which he declared that arbitration would be the sole means of resolving a dispute relating to the will or trust he created. Beneficiaries who did not agree to this term would forfeit any benefit conferred by his estate planning instruments. Harris specifically included breach of fiduciary duty claims within the mandatory arbitration provision. Moreover, the will said the clause would apply even in situations where the dispute was based on appropriate grounds. 

The Court of Appeals for Texas in Waco reviewed the Texas Arbitration Act (TAA) to determine if parties to a probate or trust dispute could be compelled to go to arbitration. While the TAA does bar mandatory arbitration provisions in certain situations, such as collective bargaining agreements, no such prohibition applies to probate matters. The court emphasized a basic principle of statutory interpretation: if the Legislature had intended to exclude probate disputes from arbitration, it could have said so. 

Similarly, the court rejected the argument that enforcing the arbitration clause would usurp the probate court’s authority to resolve disagreements among parties to a will. Justice Steve Smith’s decision noted that the court retains the power to confirm or deny the arbitrator’s holding. Given that the grandchildren who brought the challenge had accepted their bequests, the mandatory arbitration provision in the Harris will was held to be valid and enforceable. 

If you are concerned that loved ones will engage in a dispute over your will or trust after you are gone, there are several options you can discuss with your attorney. Many testators include a no-contest, or in terrorem, clause, which prevents someone who contests a will from receiving any part of the estate. However, these provisions usually will not be enforced if the challenge is made in good faith. That could be why Richard Harris opted for an arbitration requirement instead. 

Grob & Associates Law Firm PC advises clients on estate planning and represents parties in probate litigation matters. We have two North Texas offices, located in Rockwall and Wylie. To schedule a consultation, call us at 972-777-5701 or contact us online.