This article provides a brief and practical introduction to mandatory arbitration of internal trust disputes in the United States. Because trust law is a matter of individual state concern, there is a no single ‘US law’ of trust arbitration. Research shows that individual US states have demonstrated a great deal of diversity in how they deal with trust arbitration. New developments are also arising all the time, sometimes reversing previously established principles of law and sometimes charting entirely new territory.
Mandatory trust arbitration is a matter of growing concern and interest in numerous countries around the world, including the United States. However, it would be incorrect to speak of a single ‘US law’ of trust arbitration, since trusts in the United States are primarily governed by individual state, rather than federal, law.1 There is no requirement that the various states attempt to harmonize matters arising under state law, meaning that different US states can and will adopt different approaches to the arbitration of trusts.
Although principles of federalism allow individual states to act independently in matters reserved to the states, local lawmakers are aware of the benefits of consistency in matters of trust law. To that end, expert working groups have promulgated various model laws on trusts,2 whereas judges traditionally consider case law from other US jurisdictions as a matter of persuasive precedent, particularly when faced with a novel issue. Consistency across state lines could also be achieved in this field as a matter of arbitration law, as would be the case if the Federal Arbitration Act (FAA) were found to control matters involving trust arbitration.3 Although commentators have claimed that most trusts in the United States involve interstate commerce and therefore fall within the confines of the FAA,4 individual courts have split as to whether state or federal arbitration law should apply to trust arbitration.5 However, no state or federal court has analysed this issue in detail yet, since parties to the various disputes have thus far agreed on the applicable law.
At this point, most US states allow trustees to enter into arbitration agreements concerning a variety of internal and external trust disputes.6 These procedures are relatively uncontroversial.7 Instead, the primary concern in the United States involves the use of mandatory arbitration provisions found in the trust itself. This type of procedure raises a number of jurisprudential difficulties similar to those experienced in other common law jurisdictions.8 A growing number of US states have considered these types of provisions judicially or legislatively, making the United States an excellent proving ground to test for various approaches. Although it is impossible to discuss all of these developments at length,9 this article nevertheless provides a brief practical introduction to the law regarding mandatory trust arbitration in the United States.
When considering these issues, it is useful to distinguish between: (i) states with legislation explicitly permitting arbitration of trust disputes through inclusion of a provision in the trust itself; (ii) states with legislation explicitly permitting arbitration of trust disputes but without reference to provisions found in the trust itself; and (iii) states without legislation concerning trust arbitration. Each is discussed separately below.
States with legislation explicitly permitting arbitration through inclusion of a provision in the trust itself
The easiest situation to describe involves jurisdictions that have enacted a statute recognizing the validity of an arbitration provision found in a trust. Two US states have done so to date.
Florida was the first state to address mandatory trust arbitration legislatively, enacting a provision in 2007 indicating that:
While the Florida statute includes a carve-out for challenges to the trust itself,11 the range of arbitrable matters nevertheless appears relatively broad. However, the precise scope of this legislation is somewhat unclear, since no cases have yet been decided under this provision.
A provision in a will or trust requiring the arbitration of disputes, other than disputes of the validity of all or a part of a will or trust, between or among the beneficiaries and a fiduciary under the will or trust, or any combination of such persons or entities, is enforceable.
Unless otherwise specified in the will or trust, a will or trust provision requiring arbitration shall be presumed to require binding arbitration under s. 44.104.10
Arizona was the second state to address this issue legislatively. This statute, which was specifically enacted in 2008 to overturn one of the best-known trust arbitration cases to come out of the United States in recent years, Schoneberger v Oelze,12 indicates that:
[a] trust instrument may provide mandatory, exclusive and reasonable procedures to resolve issues between the trustee and interested persons or among interested persons with regard to the administration or distribution of the trust.13
The Arizona Court of Appeals considered this provision in 2011 in Jones v Fink, concluding that the statute is to be construed broadly to include:
The court in Jones also held that the trust arbitration statute has eliminated any need for consent to act as a precondition to arbitration under Arizona law.15 So long as the arbitration provision:
any matter involving the trust’s administration, including a request for instructions and an action to declare rights.14
arbitration will act as:
provides reasonable procedures and a dispute arises concerning the administration and distribution of the trust,
Although the decision in Jones is unpublished and therefore of limited precedential value,17 it provides a useful description of how far Arizona has come since the now-superseded decision in Schoneberger.18
the mandatory and exclusive avenue for resolving that dispute, regardless of whether the interested parties agreed to those provisions.16
States with legislation explicitly permitting arbitration of trust disputes but without reference to provisions found in the trust itself
Only two US states have enacted legislation specifically addressing arbitration provisions in trusts. However, a far greater number of states provide for trust arbitration without making reference to arbitral provisions found in the trust itself.19 While the precise language used varies from jurisdiction to jurisdiction, one of the more widely adopted approaches is found in the Uniform Trust Code (UTC), a model enactment that has been adopted in whole or in part by 24 US states.20
Section 111 of the UTC indicates that:
so long as doing so does:
interested persons may enter into a binding nonjudicial settlement agreement with respect to any matter involving a trust,
not violate a material purpose of the trust and include terms and conditions that could be properly approved by the court under this [Code] or other applicable law.21
The scope of arbitrable matters is quite broad, including, among other things:
the interpretation or construction of the terms of the trust;
the approval of a trustee’s report or accounting;
direction to a trustee to refrain from performing a particular act or the grant to a trustee of any necessary or desirable power;
the resignation or appointment of a trustee and the determination of a trustee’s compensation;
transfer of a trust’s principal place of administration; and
liability of a trustee for an action relating to the trust.22
A number of these items relate to internal matters of trust construction and administration and thus expand the concept of arbitrability beyond mere contract concerns to key issues of substantive trust law. This is very helpful, since it recognizes that arbitrators are capable of resolving complex trust-related controversies.23
Some questions may arise as to whether the UTC makes certain issues subject to the exclusive jurisdiction of the court. For example, statements indicating that:
could be read as barring arbitrators from rendering a consent award (ie an award based on a settlement agreement).25 Jurisdictional provisions such as these are often challenging, since they can be read either as a prohibition on the resolution of certain issues in all other fora, judicial or arbitral, or simply as a prohibition on the resolution of those issues in any court other than the court named in the statute (typically the probate or chancery court).26 While detailed consideration of exclusive jurisdiction provisions is beyond the scope of this article, parties should avoid making any assumptions about how a court will interpret such statutes.27
[a]ny interested person may request the court to approve a nonjudicial settlement agreement, to determine whether the representation as provided in [Article] 3 was adequate, and to determine whether the agreement contains terms and conditions the court could have properly approved24
As useful as Section 111 of the UTC is, it fails in one important regard, namely in describing the manner in which trust arbitration can be invoked. Indeed, the drafters of the UTC were purposefully vague when it came to identifying who could enter into these sorts of nonjudicial agreements,28 simply defining the term ‘interested persons’ as:
As a result, the UTC provides no definitive answer to the question of whether a settlor can require nonjudicial resolution of disputes arising under the trust through inclusion of an arbitration provision in the trust or whether it is only the trustee who has the power to enter into arbitration agreements at some point after the trust has been created.
persons whose consent would be required in order to achieve a binding settlement were the settlement to be approved by the court.29
To some extent, only allowing trustees to enter into arbitration agreements would seem somewhat in tension with the UTC’s broad approach to arbitrability, since internal trust concerns are most effectively addressed through an arbitration provision in the trust itself rather than a post-dispute agreement concluded by the trustee. While trustees could attempt to enter into individual arbitration agreements with potential parties to an internal dispute after the creation of the trust but before a dispute arises, that approach is logistically and jurisprudentially difficult.30
Other sections of the UTC are equally unhelpful in resolving this issue. For example, Section 816(23) states that a trustee may:
However, this provision is equally ambiguous, in that it can be read as suggesting either that only a trustee has the ability to enter into arbitration under Section 111 (since the powers listed in Section 816 as devolving to trustees are a compilation of specific powers listed elsewhere) or that persons other than the trustee may have the ability to enter into arbitration under Section 111 (since the powers listed in Section 816 are not said to be exclusive to the trustee).32 This issue does not seem to have been judicially considered yet, although one factor in favour of the settlor’s ability to mandate arbitration of internal trust disputes is found in the commentary to Section 816, which states that:
resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution.31
[s]ettlors wishing to encourage use of alternate dispute resolution may draft to provide it.33
Although the UTC constitutes a significant step forward with regard to the arbitrability of internal trust disputes, some state statutes go even further. For example, Washington and Idaho have both enacted provisions indicating that:
[t]he ‘matters’ that may be addressed and resolved through a nonjudicial procedure are broadly defined and include any issue, question, or dispute involving: (i) the determination of any class of creditors, devisees, legatees, heirs, next of kin, or other persons interested in an estate, trust, nonprobate asset, or with respect to any other asset or property interest passing at death; (ii) the direction of a personal representative or trustee to do or to abstain from doing any act in a fiduciary capacity; (iii) the determination of any question arising in the administration of an estate or trust or with respect to any nonprobate assets or any other asset or property interest passing at death, including, without limitation, questions relating to the construction of wills, trusts, community property agreements, or other writings, a change of personal representative or trustee, a change of the situs of a trust, an accounting from a personal representative or trustee, or the determination of fees for a personal representative or trustee; (iv) the grant to a personal representative or trustee of any necessary or desirable power not otherwise granted in the governing instrument or given by law; and (v) the amendment, reformation, or conformation of a will or trust instrument to comply with statutes and regulations of the Internal Revenue Code in order to achieve qualification for deductions, elections, and other tax requirements.34
These statutes obviously go beyond what the UTC contemplates in terms of arbitrable concerns. However, the Washington and Idaho statutes suffer from the same problem that the UTC did, namely ambiguity with respect to who may invoke arbitration and how.35 Although it would again seem incongruous to permit arbitration of such a wide range of internal matters without providing an appropriate mechanism by which to invoke such proceedings (ie a mandatory arbitration provision in the trust itself), no court has yet considered whether these statutes permit arbitration based on a clause found in the trust itself.
States without legislation concerning trust arbitration
The third category of states to consider involves jurisdictions that have not addressed trust arbitration by statute. While there is some perception that precedent in this area of law is ‘thin and underdeveloped’,36 research shows a growing amount of case law concerning mandatory trust arbitration, even if many of these decisions have not been widely publicized within the trust bench and bar.37 These opinions can be separated into three different categories: (i) older decisions that once acted as significant stumbling blocks to the arbitration of trust disputes but that have recently been abrogated either judicially or legislatively, (ii) contemporary cases considering whether an arbitration provision in a trust is enforceable under the relevant arbitration statute, and (iii) recent opinions discussing whether an arbitral tribunal can hear claims relating to the incapacity of the settlor. Each line of cases is considered separately below.
Cases that have been recently abrogated
The current surge in interest in mandatory trust arbitration makes it seem as if the procedure is relatively new. However, these issues have been discussed at various times in the past, often in connection with the publication of an opinion touching on a particularly relevant probate issue.38 Interestingly, several of these cases have recently been abrogated either judicially or legislatively, even though they once acted as significant stumbling blocks to the arbitration of trust disputes.
The most well known of these recent reversals involves Schoneberger v Oelze, an Arizona Court of Appeals case that was frequently cited for the proposition that an arbitration provision in a trust is not enforceable because a trust is not a contract.39 However, the Arizona legislature overturned the decision by statute in 2008, creating a pro-arbitration environment that has subsequently won judicial approval in Arizona.40
Another case that was frequently cited in the United States as curtailing the arbitration of trust disputes was In re Jacobovitz’ Will, a New York state court decision from 1968 that stood for the proposition that wills (and, by extension, trusts) were non-arbitrable as a matter of public policy.41 However, In re Jacobovitz’ Will has recently been called into question by In re Blumenkrantz, which allowed the arbitration of internal trust matters.42
A similar philosophical shift has also been seen in Michigan. For years, Meredith’s Estate, a 1936 decision from the Supreme Court of Michigan, was read as prohibiting trust arbitration on the grounds that trust disputes are in rem proceedings.43 However, Meredith’s Estate has been superseded by implication by In re Nestorovski Estate, which concluded that an arbitration proceeding did not improperly oust the court of its jurisdiction over probate concerns.44 This demonstrates that although the in rem nature of trust proceedings can be considered problematic in the United States and elsewhere, it need not be fatal to arbitration of trust disputes.45
Cases arising under the relevant arbitration statute
Because arbitration is ‘a creature of contract’,46 arbitration agreements typically must either be contained within a contractual document or independently meet the necessary contractual criteria.47 These requirements, which are typically located in arbitration statutes, can create difficulties for trust arbitration, since trusts are typically only signed by the settlor, not by other parties, and often do not involve the exchange of consideration.48 Several US states have recently addressed issues relating to the contractual nature of trusts and arbitration.
For example, in Diaz v Bukey, the California Court of Appeal (Second District) considered whether a dispute between a trustee and a beneficiary can be made subject to arbitration pursuant to a provision in the trust itself.49 In this case, the defendants claimed that plaintiffs should not be allowed to accept some of the benefits under a trust without accepting all of the trust provisions, including the arbitration clause, under either a third-party beneficiary or an equitable estoppel theory. The court denied the defendants’ motion to compel arbitration on both grounds, holding that the arbitration provision was unenforceable because, in the court’s view, the California Arbitration Act requires arbitration agreements to be contracts or contained within a contract and a trust is not a contract under California law.50
In reaching its conclusion, the court in Diaz considered the Arizona Court of Appeals decision in Schoneberger v Oelze, even though Schoneberger had subsequently been superseded by statute and the Arizona arbitration statute at issue in Schoneberger was quite different than the California arbitration provision.51 For example, the Arizona statute cited by the court in Diaz refers to:
whereas the California statute merely refers to:
[a] written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration
Although the California Court of Appeals failed to address the difference between an ‘agreement’ and a ‘contract’, that distinction has been considered critical by other authorities.53
[a] written agreement to submit to arbitration an existing controversy or a controversy thereafter.52
The decision in Diaz has been appealed to the California Supreme Court, with a decision expected in early 2013. Under the California Rules of Court, the appellate decision is considered ‘depublished’ and has no precedential value until the California Supreme Court acts.54
Diaz is not the only California decision relating to mandatory trust arbitration. Roehl v Ritchie is another Court of Appeals case, albeit from a different district (the Fourth District).55 This case, which considered certain problems associated with a series of arbitral awards rendered by an arbitrator who was dealing with an accounting issue under a trust, gave rise to no difficulties concerning the enforceability of the arbitration provision in question, even though that provision was contained in the trust itself. Although the court in Diaz attempted to limit the scope of Roehl v Ritchie on the grounds that none of the parties in Roehl had apparently objected to the use of arbitration, the decision still stands and can be used for a variety of purposes, including the arbitrability of internal trust concerns including interim accountings.56 Of course, it is possible that the California Supreme Court will address Roehl when it discusses Diaz, so parties should stay abreast of developments.
California is not the only US state to consider contract-based defences to mandatory trust arbitration. The Court of Appeals of Texas was also recently asked to consider the enforceability of an arbitration provision found in a trust in Rachal v Reitz.57 In a divided decision, the Court of Appeals, sitting en banc, decided that a trust is not a contract and that the arbitration provision in question was therefore invalid.58 Interestingly, the Texas Arbitration Act, like the California Arbitration Act, only mentions an ‘arbitration agreement’ rather than an arbitration ‘contract’, a point that the four dissenting judges thought was significant.59 This decision has been appealed to the Texas Supreme Court, with argument due in fall 2012 and final disposition anticipated in late 2012 or early 2013.60 A related case involving the same defendant is also awaiting a decision from the Texas Supreme Court.61
Contract-related claims regarding mandatory trust arbitration have also been heard in US federal court, although the issue was decided as a matter of state, rather than federal, law.62 Thus, for example, the federal district court for the Southern District Court of Mississippi considered whether a lack of consideration made an arbitration provision in a trust unenforceable in New South Federal Savings Bank v Anding.63 According to the court:
This is an interesting approach for a court to take, since it relies on contract law, as opposed to trust or arbitration law. This analysis suggests that any US state that does not require contracts to reflect mutual consideration might be able to uphold arbitration provisions in trusts.65
[m]utuality of obligations is not required for a contract to be enforceable under Mississippi law. Accordingly, this court is not persuaded that the agreement to arbitrate contained in the Deed of Trust is deficient.64
New South Federal Savings Bank v Anding is interesting for a second reason. In this case, the defendant asserted another contract defence relating to the arbitration provision, namely procedural and substantive unconscionability.66 While the court in New South Federal Savings Bank found those claims to be unavailing under Mississippi state law, unconscionability is one of the primary means of opposing an arbitration provision in the United States.67 Therefore, parties to a trust arbitration should be prepared to address such issues in the future.
Cases concerning the incapacity of the settlor
Although Diaz v Bukey and Rachal v Reitz have garnered a significant amount of attention within the trust industry, there is another line of cases that has not received as much notice, even though the matters discussed are of equal importance to trust arbitration. The issue here is whether a claim that the settlor was incapable of making a trust can invalidate an arbitration provision found in a trust.
Decisions relating to other aspects of trust law suggest that claims of undue influence, lack of capacity, fraud, duress, and mistake in the making of a trust are just as likely to result in the invalidation of the entire trust as they are to lead the court to sever the offending provision.68 Indeed, one California court appears to have adopted precisely this type of all-or-nothing approach after it was:
Because the impropriety was said to be infused throughout the arbitration agreement, the court struck the arbitration provision in its entirety.70
faced with an arbitration agreement in which no single provision [could] be stricken to remove the unconscionable taint. 69
The problem with this approach is that it could allow parties routinely to invalidate arbitration provisions found in trusts simply by claiming a lack of capacity. The arbitral community recognized years ago that the effectiveness of the arbitral regime would be put in jeopardy if parties could avoid arbitration simply by alleging that incapacity, fraud, duress, forgery, or mistake not only invalidated the substantive agreement but also impeached any arbitration agreement located within the underlying contract.71 As a result, courts in the United States and elsewhere developed the principle of separability, which in general terms states that challenges to the validity or existence of the contract in which an arbitration agreement is found do not affect the validity or existence of the arbitration agreement itself.72
While the basic principle of separability can be stated succinctly, the doctrine’s precise parameters vary somewhat according to local law. Some jurisdictions take the view that the only time a claim will be heard by a court is if the party challenges the validity of the arbitration agreement itself (as opposed to the document in which the agreement is found) or if the party has specifically given the issue of validity to the court.73
Case law regarding separability under the FAA is particularly complicated.74 The analysis begins with the US Supreme Court decision in Prima Paint Corp v Flood & Conklin Manufacturing Co, which held that:
This means that the dispute regarding the validity of the arbitration agreement can be arbitrated along with the substantive claim. The Supreme Court extended this basic principle in Buckeye Check Cashing Inc v Cardegna to:
claims of fraudulent inducement, directed at the underlying contract and capable of rendering it voidable, [do] not impeach the arbitration clause contained in that contract.75
cases involving claims that the underlying contract was void or illegal.76
a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator.77
Although Buckeye Check Cashing expressly held that the analysis was to be the same regardless of whether the underlying contract was said to be void or voidable:
[lower] U.S. courts have adopted different approaches to the effects of the separability presumption depending on whether (a) the validity, legality, or continued effectiveness of the underlying contract is challenged; or (b) the existence of the underlying contract is challenged.78
The first category of cases—which includes matters concerning fraudulent inducement as well as fraud, illegality, lack of consideration and mistake—can be heard by the arbitrator.79 The second category of cases—which involves challenges to the existence of the underlying contract—are more difficult, since Buckeye Cashing only addressed contract validity and not the question of whether any agreement between the parties was ever concluded.80 As it currently stands, no consensus in the United States exists as to whether:
This makes it very difficult to anticipate how US judges will or should address issues relating to the alleged incapacity of the settlor in cases involving mandatory trust arbitration.82 Only a few courts have addressed this issue, but the decisions already diverge.
claims of lack of capacity or authority, directed at the underlying contract, also necessarily impeach the associated agreement to arbitrate.81
So far, three alternatives appear to exist. First, some courts take the view that the standard separability analysis does not apply to trust disputes. For example, Spahr v Secco considered what effect, if any, the alleged mental incapacity of the settlor might have on the arbitration of a dispute related to the trust.83 Ultimately, the court concluded that:
Because challenges based on lack of mental capacity:
the analytical formula developed in Prima Paint cannot be applied with precision when a party contends that an entire contract containing an arbitration provision is unenforceable because he or she lacked the mental capacity to enter into the contract. Unlike a claim of fraud in the inducement, which can be directed at individual provisions in a contract, a mental capacity challenge can logically be directed only at the entire contract.84
the decision was that disputes based on mental incapacity should be heard in court, not in arbitration.85
naturally go to both the entire contract and the specific agreement to arbitrate in the contract,
Although the arbitration provision in question in Spahr was in an external agreement rather than the trust itself, the decision is instructive as to how capacity issues may be addressed in internal disputes. Notably, if the approach in Spahr were allowed to stand, it would negate the concept of separability in trust disputes.86 Courts adopting this view would likely not only refuse to enforce an arbitration provision found in a trust whenever a challenge was made to the mental capacity of the settlor, they would also refuse to order arbitration of trust disputes in cases involving duress and forgery. However, Spahr was handed down prior to the US Supreme Court’s decision in Buckeye Cashing and may therefore no longer be good law.87
Other judges appear inclined to adopt the standard separability analysis, as in Regions Bank v Britt, which involved whether and to what extent an arbitral tribunal could consider trust-related claims that purportedly affected a party’s statutory succession rights.88 Although this challenge was not based on the alleged incapacity of the settlor, it did attack the underlying validity or existence of the trust in which the arbitration provision was found.89 Ultimately, the court found that the issue could and more properly should be heard in arbitration, based on the rule in Prima Paint.90
A third approach to the issue of separability is seen in Weizmann Institute of Science v Neschis, which considered whether and to what extent an arbitral award rendered in Liechtenstein should be given preclusive effect in a US court proceeding involving claims that were very similar to those determined in the arbitration.91 One of the issues raised in the arbitration involved the mental capacity of the settlor, who was alleged to have been suffering from Alzheimer’s disease at the time he established several foundations (‘stiftung’), which are Liechtenstein’s version of a trust.92 The arbitration provision in question was located in the charter establishing the foundation.93
At no point did the court in Weizmann Institute take the position that issues of settlor capacity could not be heard in arbitration. Instead, the judge refused to hear argument on matters relating to the mental capacity of the settlor, based on principles of collateral estoppel.94 This suggests that a per se rule barring arbitration of trust disputes involving the mental capacity of the settlor would not necessarily be appropriate, despite the analysis in Spahr v Secco.95
Weizmann Institute stands for another important principle, namely that US courts will uphold foreign arbitral awards arising out of trust-related arbitration in the same way that they do awards arising out of other types of civil or commercial arbitration.96 While this one decision does not bind the entirety of the United States, the strong pro-arbitration policy espoused by US courts, particularly in cases involving international arbitration, suggests that foreign awards will be granted significant deference, even if they arise out of an arbitration provision found in a trust.97 Indeed, no less an authority than the US Supreme Court has stated that the:
concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce the parties’ agreement, even assuming that a contrary result would be forthcoming in a domestic context.98
As the preceding shows, the law regarding mandatory trust arbitration in the United States is not as ‘thin and underdeveloped’ as some commentators believe.99 Instead, there are numerous judicial and legislative authorities in a variety of individual US states. Nevertheless, trust arbitration in the United States stands at something of a crossroads, with several closely watched cases currently under review. Although the decisions will not constitute binding precedent in other states, they may be considered persuasive authority elsewhere in the nation.
As the law in this area develops, courts and legislatures will need to address a number of key concerns. For example, it will soon become necessary to determine whether and to what extent mandatory trust arbitration is governed by the FAA. Placing trust arbitration under the control of federal law will likely eliminate many of the inconsistencies that currently exist across state lines. However, such a move may also calcify the development of this area of law, making it more difficult for new innovations to arise.
At some point, courts will also need to determine whether the UTC permits mandatory trust arbitration. Although states are free to interpret their own legislation in any way that they wish, judges often try to achieve consistency with other jurisdictions when interpreting statutes based on a model act. Therefore, a few well-placed precedents could help establish some degree of predictability among the 24 states that have adopted the UTC in whole or in part.
Finally, US courts need to consider whether and to what extent precedents relating to personal trusts also apply to commercial trusts, since there is some debate in the US trust community as to the extent to which the two kinds of trusts are or should be treated similarly.100 While this issue has not been raised herein, it is quite relevant, since over 90 per cent of the money that has been held in trust in the United States in recent years has been held in commercial trusts rather than personal trusts.101 As a result, some commentators believe that:
particularly when compared to the ‘enormously important’ role of trusts in the business context.102 It may very well be that arbitration relating to commercial trusts is more akin to arbitration relating to other commercial matters and thus may be more amenable to the strong pro-arbitration policy that exists in the United States.103 However, this intriguing and important topic will have to be taken up at a different point.
the role of trusts in intrafamily wealth transfers is today ‘relatively trivial’,
The author, who is admitted to practice as an attorney in New York and Illinois and as a solicitor in England and Wales, is Senior Fellow at the Center for the Study of Dispute Resolution and Associate Professor of Law at the University of Missouri, as well as a member of the American Law Institute (ALI) Consultative Groups for the Restatement (Third) of Trusts and the Restatement (Third) of the U.S. Law of International Commercial Arbitration. This article was completed while the author was the Henry G. Schermers Fellow at the Hague Institute for the Internationalisation of Law (HiiL) and the Netherlands Institute for Advanced Study in the Humanities and Social Sciences (NIAS), and the author gratefully acknowledges the support of both institutions.