Usually, trust-related disputes are resolved through a court hearing. This is largely due to the fact that trust administration is subject to court supervision, usually by the court in which the trust was administered. If there are disputes regarding the trust, there are effective ways to resolve these issues that can save your family time and money. If you’re a California resident, here are some things you should know about trust litigation.
When it comes to trust litigation, arbitration awards are usually easier to enforce across state borders than court judgments. However, this method is not used often for trusts.
Trusts are seen as contracts in the US, so, more than likely, the arbitration clause will be binding for the beneficiaries and the trustee. Trusts are not treated as contracts outside of the US so the arbitration clause may not be legally binding if the trust was not established in the United States.
You can also choose mediation as a form of trust litigation. This type of resolution must be facilitated by a negotiator who works independently of the court. However, there are some exceptions: Parties in Wales and England could be penalized in post-trial costs if there is a refusal to mediate. Some Canadian provinces will assign a court-appointed mediator who will report on the progress of the mediation and submit the information to the court.
Mediation can be beneficial because it is confidential. Neither party is allowed to reference documents or conversations used during the mediation process, which protects everyone involved in the trust. All parties must sign a written agreement to ensure the terms established in mediation are legally binding.