Estate litigation is costly and emotional, so it’s no surprise that some testators try to avoid it by including arbitration clauses in their wills. But in in re Hekemian, the Appellate Division held that, in New Jersey, those clauses likely don’t hold up, at least under current law.
Samuel Hekemian’s will require that all disputes involving the will or its related trusts be resolved through arbitration and explicitly stated that arbitration was the “exclusive remedy.” After Samuel’s death, one of his sons filed a lawsuit seeking an accounting. The executors tried to force arbitration, arguing that the son was bound by the will’s terms. He sought benefits under the will, he never challenged the will’s validity, and he had made direct requests under the trusts.
Both the trial court and the Appellate Division rejected the attempt to compel arbitration. They reasoned that there was no mutual assent. Wills are unilateral documents, not contracts, so there’s no agreement between two parties to arbitrate. The right to sue must be clearly waived. Under New Jersey law, a valid arbitration clause must provide a clear waiver of the right to access the courts. This Will did not. Statutory rights can’t be overridden. The plaintiff had a statutory right to an accounting under N.J.S.A. § 3B:17-2, which the court found could not be displaced by a will’s arbitration clause. Equitable estoppel didn’t apply. The court rejected arguments that the son was “equitably estopped” from avoiding arbitration simply because he had requested trust benefits.
The court emphasized that no New Jersey statute or case law currently authorizes arbitration clauses in wills. It stopped short of ruling them categorically unenforceable, but made clear that without legislative guidance or clear contractual consent, they likely won’t be upheld.
The Enforceability of Arbitration Clauses
If you’re drafting an estate plan in New Jersey and hoping to avoid courtroom battles, an arbitration clause might not be enforceable, at least not in a will.
