I. Alternative Dispute Resolution
It is evident that a testator will be inviting conflict and discord to the family if he or she does not discharge basic moral parental and spousal obligations when creating his or her will. Even if a testator thinks that he or she has a valid reason for a disinheritance or a gift that otherwise falls short of “normal” expectations, the testator must not think that he or she can necessarily get around it by giving an explanation in the will. While a court of course will want to know the testator’s reasons for such a decision, if the reason is irrational or distorts the truth, it will be given no significance. A will with an irrational or incomplete explanation of the gifting scheme can and often does lead to estate litigation.
Estate litigation is often expensive and potentially traumatic in nature, due to the history between the parties who are usually involved in the dispute. This is particularly true where one adult sibling is favoured over the other siblings. Often emotional issues which had been dormant for years are re-born during the estate litigation process. What often results is an emotionally and financially expensive fight between family members, driven by more than just the issues in the action. In such circumstances, lawyers are attempting to promote alternative dispute resolution methods, such as mediation, as an alternative to the courtroom.
II. Determining the Appropriate Dispute Resolution Process
In determining which procedure is most appropriate, many considerations come into play. The nature of the relationship between the parties, the amount of the estate in issue, the complexity of the proceedings, the allegations made in the proceeding, and the objectives of the parties are some of the many factors which will assist in choosing the appropriate process for resolving the dispute in question.
Arbitration has certain advantages as the process for resolving disputes. One of the major advantages is privacy; unlike the results of a trial, the results of an arbitration can remain known only to the parties. Other advantages include:
- the ability to (jointly) chose the person who will be making the determination;
- possibly having the matters determined earlier than would be in a trial; and
- ability to agree on less formal procedures than at a traditional trial.
Arbitration has not become as accepted in estate litigation as mediation, which is qualitatively different from litigation and arbitration.
Mediation uses a third party as a facilitator for the parties themselves to resolve their dispute. Mediation is a procedure which is often used to preserve a continuing relationship and can often be useful when a threshold question of entitlement or liability is not an issue but the monetary amount is. However, there are circumstances where mediation is not appropriate, such as if there is a need to off-set a power imbalance.
Mediation is a process of bringing the parties together to discuss the possibility of settlement, with the assistance of a trained mediator. The mediator often, but not always, has legal training and experience, as well as further training as a mediator. The mediator is jointly retained by the parties, and is neutral in the sense that he or she does not advocate on behalf of any party to the dispute. However, unlike a judge or arbitrator, the mediator does not have the power to impose a result or settlement on the parties.
The fact that the parties themselves must agree to the outcome of a mediation is one of the advantages to this process. As well, mediations can often take place earlier than would a trial, take less time (one or a few days instead of weeks of trial), are less formal and therefore more flexible than a trial, and are usually less expensive than a full trial of the matter. Of particular note in estate litigation, the mediation also offers a forum in which the parties can express their emotional concerns to one another before moving forward towards a settlement of the dispute.
While alternative dispute resolution is often used in estate litigation, trial remains the most appropriate route in some circumstances. One such example is where there are cases of fraud in an estate.
D. Multiple Processes
It is not uncommon to utilize different dispute resolution processes as a case develops. For example, it may be necessary to commence an action and proceed through the discovery process (exchange of relevant documents and possibly oral examination for discovery), but then to move into a mediation, which in turn may not be entirely successful but might succeed in narrowing the issues which will ultimately result in some kind of settlement. There are, of course, times when nothing short of a full trial is necessary. As such, litigation remains a tool, but not to the exclusion of other techniques. Experienced counsel should play a key role in advising as to which procedure is most likely to resolve the conflict in the most expeditious manner while at the same time obtaining the best possible result.
III. Trust Related Dispute Resolution
The development of the trust created numerous legal challenges and disputes which contributed to much litigation. The different types of disputes are almost inestimable. What can be stated with certainty is that the cost and energy of litigation has been enormous. Today in all aspects of our legal culture, a major transformation is occurring wherein the courts are being relied upon less and alternative forms of dispute resolution as has been discussed are increasingly invoked. While the dispute resolution processes outlined above can be used after the conflict arises, mediation can be effectively used at the earliest stages of trust creation, before a dispute develops.
The use of an independent mediator during the initial structuring phase is in its infancy but those who have utilized same report a high degree of client satisfaction because of the reduction of the possibility of family litigation. The object, therefore, of using a mediator in estate planning is to eliminate future problems rather than to resolve outstanding litigation.
The benefit of using an independent mediator is that it permits the disclosure of information during the planning when otherwise estate planners would have to rely upon incomplete or inaccurate data.
Most planning structures have not historically included potential trust beneficiaries heirs as active participants. Those in close relationships may be reluctant to raise sensitive issues. Unfortunately, avoiding a problem usually results in future conflict. Accordingly, at the point that a practitioner sees potential conflicts, the benefits of a skilled mediator ought to be considered. Some of the situations which we have found to be most amenable for an independent mediator are:
- divorce and multiple marriages;
- family-owned businesses;
- children who may be mentally or physically challenged; or
- significant difference in economic circumstances of beneficiaries.
Regardless of whether a mediator is employed before or after the dispute arises, the mediator’s involvement often results in an earlier and more cost-efficient resolution.