Background
Samuel P. Hekemian died testate in August 2018, survived by his wife Sandra and four sons. In his 2002 will, which revoked a 2001 will, Samuel included an arbitration provision in Article Seventeenth requiring all disputes regarding the will’s interpretation or the administration of his estate and trusts to be resolved through binding arbitration rather than litigation. Samuel appointed his son Peter and attorney Edward G. Imperatore as co-executors and co-trustees.
After Samuel’s death, his estate was admitted to probate. Sandra received distributions under the 2002 will, while son Richard, who had not yet received distributions, sought formal accountings. When the co-executors filed their accounting, both Sandra and Richard filed exceptions challenging it. The co-executors responded by moving to compel arbitration under the will’s arbitration clause.
The Chancery Division (trial court) denied the motion to compel arbitration, finding that neither Richard nor Sandra had assented to the arbitration provision and that Sandra’s receipt of distributions did not constitute acceptance of the arbitration clause. This was the second time the arbitration provision was before the appellate court, as a prior appeal in a related matter (2023) had assumed its invalidity without expressly deciding the issue.
The Court’s Holding
The New Jersey Superior Court, Appellate Division affirmed the denial of the motion to compel arbitration and expressly held for the first time that arbitration provisions in testamentary instruments are unenforceable in New Jersey. The court ruled that Article Seventeenth failed because it lacked mutual assent—a fundamental requirement for any binding arbitration agreement. Unlike parties to a commercial contract, neither Sandra, Richard, nor any other interested parties under the will had voluntarily agreed to waive their right to resolve disputes in court.
The court reasoned that while a will is valid as a unilateral disposition of property without requiring a “meeting of the minds,” once interested parties dispute that disposition, they cannot be compelled to arbitrate without their consent. The arbitration clause itself failed to adequately explain to parties that they were waiving their fundamental right to access the courts. Although Sandra had executed a reciprocal will with Samuel in 2001 containing the same arbitration language, her later acceptance of distributions under the 2002 will did not constitute assent to arbitrate disputes about that will or its administration.
Critically, the court held that arbitration of estate administration disputes is contrary to New Jersey’s probate statutory scheme. The Probate Code vests exclusive authority in Superior Courts to hear controversies respecting wills and trusts, oversee fiduciary accounts, remove fiduciaries for cause, and settle estate disputes. Enforcing arbitration clauses in wills would eliminate the courts’ expected role in protecting beneficiaries and supervising estate administration, which conflicts with the detailed statutory framework the Legislature established to govern decedent’s estates.
Key Takeaways
- Arbitration provisions in wills and trusts are unenforceable in New Jersey because testators cannot unilaterally bind non-consenting beneficiaries and interested parties to arbitration, which requires mutual assent under contract principles.
- A will is a unilateral disposition, not a contract, and does not require negotiation, but interested parties disputing that disposition retain their right to court access and cannot waive it without explicit, informed consent.
- Testators’ intent to require arbitration is irrelevant to enforceability; beneficiaries cannot be stripped of their statutory right to court resolution of estate disputes through language in a testamentary document they did not sign or negotiate.
- New Jersey’s Probate Code mandates court oversight of estate administration and fiduciary conduct; arbitration clauses that eliminate judicial review are inconsistent with this statutory scheme and public policy protecting beneficiaries.
Why It Matters
This decision establishes a clear rule that estate planners cannot use arbitration clauses to shield fiduciary conduct from judicial scrutiny or force beneficiaries to resolve disputes outside the court system. For testators seeking to avoid litigation, arbitration provisions in wills will have no force. For beneficiaries, the decision protects statutory rights to challenge executor/trustee accounts, question fiduciary decisions, and access the courts to enforce their interests in estate assets. This is particularly important because beneficiaries typically have no say in will drafting and cannot negotiate away protections the law provides them.
The decision also reinforces New Jersey’s comprehensive probate oversight system. Courts retain mandatory authority to supervise fiduciaries, examine estate accounts, remove trustees or executors for misconduct, and resolve disputes over distributions. This protects estates and their beneficiaries from unaccountable fiduciary conduct and ensures disputes are resolved by impartial judges applying probate law, not by arbitrators selected by interested parties. Estate planning attorneys must revise documents to eliminate reliance on arbitration clauses; clients wishing to avoid litigation must pursue other strategies, such as no-contest clauses or dispute resolution mechanisms that work within the court system.