How arbitration agreements in wills keep sibling rivalries out of the courtroom

Some estates lawyers are encouraging parents and children to discuss and negotiate their differences in the hopes of avoiding or narrowing conflict before wills are signed.

Jack Zwicker

While Canadians’ investment portfolios are reaching historic highs, beneficiaries of estates seeking solutions in litigation are confronted by a chronic shortage of judges. Some estates lawyers are encouraging parents and children to discuss and negotiate their differences in the hopes of avoiding or narrowing conflict before wills are signed.

A novel means of stemming the flow to our courts would merge will preparation with a written agreement signed by parents and children electing to use either mediation and arbitration or pure arbitration as the preferred conflict resolution process. In other words, a process that helps their children stay out of court.               
For centuries lawyers met clients and prepared their wills without any input from their children. With the growth of ADR and collaborative law over the last two decades, some estates lawyers have opted to bring clients and children together for a family discussion. The goal of these meetings is resolution among siblings and between children and parents as much as possible. The problem is that parents, for good reason, often want to provide for children differently or unequally.

In convening these meetings – especially in families with histories of strained relationships – lawyers may unintentionally provide the spark that ignites litigation after parents have died.

In many cases, the roots of sibling rivalry are long and deep because parents treat their children differently from an early age. As well, not all family conflicts involve the same level of intensity. While open family discussion may prove useful in those situations where the conflict level is low, it is unreasonable to assume that siblings who are deeply conflicted will be able to put their differences aside for a few hours during a family meeting merely because they are asked to.

The critical point is that such discussions, no matter how well intended, could prove to be a litigation minefield. At the end of the day, parents need to decide the contents of their wills. And their beneficiaries will either accept their parents’ wills or move to contest.                      

Although it may seem counter-intuitive, there is no need for a bright line between will-making and the use of family discussions. If we take the family-discussion model as a starting point, it makes sense that, at the same time as parents finalize their wills, the family meets to sign an agreement which acknowledges the provisions of the wills, and the children’s promise that any conflicts that arise must be resolved by means of mediation and arbitration or pure arbitration, using a single mediator or arbitrator.

Mediation and arbitration is a hybrid process that encourages the parties in conflict to resolve any disagreements by negotiation, with the assistance of a mediator. And failing agreement, that mediator shifts roles and proceeds to arbitrate the conflict and to decide it, providing an award at the end that determines the issues on a win/lose basis much as in a court of law. The key to all of this is that the family has agreed to a dispute resolution process.       

For this model to work, wills would require a strongly worded condition that would dis-entitle beneficiaries from receiving their share of the estate if they failed to comply, leaving their interest in the estate to alternate beneficiaries. Such a condition would contain a declaration by the parents of the absolute importance to them of the need to repair damaged relationships, and of their desire for their children to avoid litigation.

At common law, conditions like this are conditions subsequent, meaning exit conditions that could result in children losing their entitlements should they fail to comply. Conditions subsequent, in principle, are enforceable provided that they meet two criteria.

The first is that they are clearly written. Uncertainty can be fatal to enforcement. The second criterion is that there is no public-policy reason for courts to refuse enforcement. There is a line of jurisprudence which holds that a provision in a will forbidding litigation under statute law is against public policy. One of the leading Canadian cases is Bellinger v. Fayers, Nuytten et al in which the Court held that an attempt to prohibit a claim made under provincial statute is void against public policy. Since so much of our law is governed by statute, it would be difficult to avoid trampling over a related statute were parents to decide on language in their wills forbidding litigation.    

Bearing this in mind, the language of any such condition would have to be carefully chosen so as not to deprive the courts of jurisdiction. Instead, the condition would obligate the children to proceed to mediation and arbitration or to pure arbitration.

Assuming that parents and children make such an agreement, it will be treated as an arbitration agreement under provincial law. And under provincial law, precedence is given to arbitration over litigation through a stay of court proceedings that can be obtained on motion by any of the parties.   

Viewed from a broad, public policy perspective, the use of mediation and arbitration or pure arbitration would provide families with a shorter, less expensive dispute resolution process that can provide financial and psychological benefit. It would also alleviate stress on courts that are overburdened and under resourced.

Simply because lawyers have long compartmentalized will preparation, and outreach to family members, does not mean that this practice cannot be changed. Given the growing popularity of collaborative law, change that helps beneficiaries assert their claims utilizing out of court processes that have been pre-agreed may be unconventional but worth considering.

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