This note addresses a recent decision by the Texas State Court of Appeals concerning the enforceability of mandatory arbitration provisions found in testamentary instruments, and specifically, inter vivos trusts. After analyzing the legal background of arbitration, the use of contract principles to analyze both arbitration and trust agreements, and statutory enactments making trust arbitration provisions enforceable, this note will discuss the nuanced relationship between contract principles of construction, arbitration agreements, and trust instruments, and specifically the relationship between trust agreements and contracts. In analyzing these relationships, this note will also address the differences between the statute at issue in Rachal v. Reitz and the Arizona arbitration statute at issue in Schoneberger v. Delze, the landmark case addressing the enforceability of trust arbitration provisions. Additionally, the relationship between contract law, trust instruments, and the role of settlors' intent will be briefly discussed. Finally, this note will argue that mandatory arbitration provisions found in valid trust instruments should be enforced when they would effectuate the settlor's unambiguous intent.
Rachel M. Hirshberg,
You Can't Have Your Trust and Defeat It Too: Why Mandatory Arbitration Provisions in Trusts Are Enforceable, and Why State Courts Are Getting It Wrong,
2013 J. Disp. Resol.
Available at: https://scholarship.law.missouri.edu/jdr/vol2013/iss1/11