Alternative dispute resolution (ADR) is a great option for addressing trust and estate disputes. In fact, the Father of Our Country, George Washington, chose to provide for ADR in his own will.[i]ADR has many benefits over litigation in resolving disputes including reduced costs, faster resolution, privacy, confidentiality, and informality when compared to litigation. ADR also offers more flexibility because the parties can select the type of ADR that best meets their needs.
Arbitration vs. Mediation in Trust and Estate Disputes
As discussed in a previous post, arbitration involves the submission of a dispute to an impartial third-party (known as the arbitrator) for binding resolution. It is an adjudicative process, which results in a decision subject to very limited judicial review of the outcome. The arbitrator’s power is in the ability to make a decision when the parties can’t come to an agreement.
Mediation also uses an impartial third party (the mediator), but it involves a solution-oriented process. The mediator acts as a facilitator and uses the power of persuasion to assist the parties in arriving at a mutually agreeable compromise. The mediator doesn’t issue any type of decision.
In the context of a trust and estate dispute, either method would resolve the matter, but the process and result could be significantly different. Mediation offers much more flexibility and creativity for resolving estate-related disputes than arbitration. For example, suppose a Will calls for the Testator’s sports memorabilia collection to be divided equally between his three adult children. If a dispute arose, a judge or arbitrator would likely impose an arbitrary equal allocation of the items among the surviving children. Or, the collection might be liquidated, with each child getting an equal share of the proceeds. A mediator, however, can be much more creative. He/She might facilitate a meeting to help the children agree on a fair way to divide up the collection, item by item. Things like emotional attachments could be considered. If one of parties is not a sports fan and could care less about the items, the mediator can suggest the two sports-fan children divide the collection and pay the third child the fair market value of the collection. In short, an arbitrator makes a decision, while a mediator will work with the disputing parties to build an agreeable resolution.
Depending on the circumstances of the dispute, the parties may want to pick one method over another. They could also attempt mediation as a first step and if it doesn’t work out, they are free to pursue arbitration or litigation.
Online ADR vs. In-Person ADR
Whether the parties choose arbitration or mediation, they also have the option to conduct their ADR entirely online or in-person. Online ADR offers additional advantages over in-person ADR including ease of use, 24/7 access, speed, convenience, and reduced cost.
ARS provides the only complete end-to-end online ADR process for both mediation and arbitration. To learn more about online ADR, read about ARS’ programs for individuals and businesses or contact us for a consultation.
[i]Last Will and Testament of George Washington: “My Will and direction expressly is, that all disputes (if unhappily any should arise) shall be decided by three impartial and intelligent men, known for their probity and good understanding; two to be chosen by the disputants—each having the choice of one—and the third by those two. Which three men thus chosen, shall, unfettered by Law, or legal constructions, declare their sense of the Testators intention; and such decision is, to all intents and purposes to be as binding on the Parties as if it had been given in the Supreme Court of the United States.”