Saturday, November 9, 2013
Nancy E. Delaney, Jonathan Byer, & Michael S. Schwartz (Curtis, Mallet-Prevost, Colt & Mosle LLP) recently published an article entitled, Rachal v. Reitz and the Evolution of the Enforceability of Arbitration Clauses in Estate Planning Documents, Probate & Property Vol. 27 No. 6 (November/December 2013). Provided below is the introduction to their article:
On May 3, 2012, the Supreme Court of Texas issued its opinion in Rachal v. Reitz, 403 S.W.3d 840 (Tex. 2013), holding that an arbitration clause in an inter vivos trust instrument is valid and enforceable against the trust beneficiaries. The court’s decision is the latest step in the evolving national acceptance and enforcement of arbitration clauses in estate planning documents. This article discusses the reasoning in Rachal and explores the potential effect of the decision on the national debate. Based on Rachal, as well as case law and legislation in other states, this article also seeks to provide some practical drafting approaches for crafting arbitration clauses in trusts and wills in order to maximize the prospect of enforceability.