To Arbitrate or Not…

Many trust instruments require mediation or arbitration if there is a trust dispute. In the case of Gren v. Gren, 2014 WL 5640, decedent’s ex wife, the personal representative of the decedent’s estate, filed a petition for the construction of the decedent’s trust. Pursuant to the trust document the successor trustee filed a motion to compel arbitration.

The personal representative did nothing for 6 months and the successor trustee filed a motion to dismiss and bar any further claims in arbitration. The successor trustee complained that she could not close the trust and the personal representative neither provided names of arbitrators nor scheduled an arbitration.

The lower court granted the dismissal for the successor trustee. The Fourth District Court, however, determined that the trust document did not provide any limitation on time and that the “timeliness …is a fact question reserved for an arbitrator, not the trial judge.” The court then reversed and remanded for petition and arbitration of the dispute.

ADVICE: Be careful if you have arbitration or mediation provisions in your documents. You need to understand what they mean and whether you want those provisions in your documents.
 
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