Considering Putting an Arbitration Clause in Your Estate? Pros and Cons from a Palm Beach Probate Litigator.

I have previously blogged about the fact that Florida allows for Alternative  Dispute Resolution Clauses also known as “arbitration clauses.” This Palm Beach Probate litigator has a few arbitrations under his belt and I am happy to offer a few pros and cons to these rather new clauses. Keep in mind that I cannot offer an exhaustive list that goes on to discuss every possible intricacy of each South Florida Estate Plan. What I can do, is give you some talking points about arbitration clauses in your South Florida estate plan. 

Lets start with the basics – what is arbitration?

• Arbitration is a form of dispute resolution that is usually binding, it allows the disputing parties to consent ahead of time (usually in an employment contract or a partnership agreement or something of that sorrt) to go into arbitration.
• An arbitrator is a neutral party that essentially acts as an ad hoc judge for that dispute.

So what are the pros of an ADR clause in your estate plan?

1. speed: most would agree that the AAA and other arbitration bodies tend to be quicker than Florida Probate Courts, after all you are paying personally for them as opposed to a court that is under funded through taxes, so less cases, quicker results for you.
2. cost (maybe):  AAA and similar organizations claim to take a nominal fee to administer their case and truthfully they themselves will take just that. Keep in mind though that the arbitrator themselves also get paid and have their own fee structure so it could get expensive. Keep in mind, I had a simple partnership dispute arbitration once that took over $60,000 in arbitration fees, then we found out he had a conflict and had to hire another arbitrator.

So I alluded to cost being a toss up what other cons are there for an ADR clause in your estate plan?

1. nature of neutrality: sometimes I had a feeling that an arbitrator took into account the fact that both parties pay their bills, often they attempt to “split the baby” and I do not think that is always what is fair, nor is it usually want either party wants.
2. LACK of review. Look it can get expensive but you can appeal a decision from a Florida Probate Court, and that means if the judge does not like you, if he makes a mistake, heck even if he is just drunk and forgets a zero on your award, you can get someone to look at that after. Arbitration awards are generally unreviewable so know that if you make your family go that route, the decisions will be final.

Like I said, this is far from an exhaustive list, but I hope it gets you thinking about whether or not these are proper for you. If you want to know talk to an experienced Probate Attorney today.