You Cannot Arbitrate a Will Dispute in New Jersey

You Cannot Arbitrate a Will Dispute in New Jersey

by | May 12, 2026 | Estate Administration, Estate Planning, Last Will and Testament, Probate, Trusts

Can a testator include an arbitration clause in their Will that forces beneficiaries to resolve disputes in a private arbitration forum rather than a New Jersey court? For the first time, the New Jersey Appellate Division has answered that question directly — and the answer is no.

In a case published on April 21, 2026, In re Estate of Samuel P. Hekemian, the Appellate Division held that an arbitration provision contained in a Last Will and Testament is unenforceable under New Jersey law.

Background: The Hekemian Family Estate

Samuel P. Hekemian died testate in August 2018, survived by his wife Sandra and their four adult sons: Peter, Jeffrey, Mark, and Richard. His 2002 Last Will and Testament (2002 LWT) appointed his son Peter and longtime advisor Edward G. Imperatore, Esq. as co-executors and co-trustees of three testamentary trusts established under the Will.

The 2002 LWT contained an arbitration clause providing that any dispute regarding the interpretation of the Will or its administration “shall be submitted for settlement by arbitration.” The clause declared arbitration to be “the exclusive remedy” for resolving such disputes and stated that the arbitrator’s decision “shall be final and binding upon all interested parties and shall not be appealable to any court of law.”

The same arbitration provision appeared in reciprocal Wills executed simultaneously in 2001 by Samuel and Sandra that were prepared by the same New York attorney. When Sandra and Richard later filed exceptions to the co-executors’ first intermediate accounting of the estate, the co-executors moved to compel arbitration.

A Second Look at the Same Arbitration Clause

This was not the first time the arbitration provision had been challenged. In an earlier unpublished opinion, the Appellate Division had affirmed the denial of a motion to compel arbitration of Richard’s request for an accounting, finding that the clause was not the product of mutual assent under traditional contract principles and that it failed to explain that Richard was relinquishing his right to bring a claim in court. At that time, however, the court stopped short of declaring the arbitration provision categorically unenforceable.

In the intervening period, Sandra joined the litigation and filed her own exceptions to the co-executors’ accounting. Unlike Richard, Sandra had received distributions under the 2002 LWT. The co-executors argued this distinguished her situation and that her participation in the Will’s benefits, combined with the execution of the reciprocal 2001 Wills, established the mutual assent necessary to compel her to arbitrate. The trial court rejected that argument and denied the motion. The co-executors appealed.

The Court’s Holding: Two Independent Grounds

The Appellate Division affirmed the trial court’s denial, but went further than the lower court by issuing a definitive ruling on a question of first impression: arbitration clauses in testamentary instruments are unenforceable under New Jersey law. The court rested its holding on two independent and mutually reinforcing grounds.

1. Lack of Mutual Assent

An agreement to arbitrate, like any contract, requires mutual assent — a knowing and voluntary waiver of the right to pursue claims in court. The court reaffirmed its earlier conclusion that the arbitration clause failed to explain, in clear and unambiguous terms, that interested parties were relinquishing their right to sue. Citing Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (2014), the court emphasized that “the point is to assure that the parties know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue.”

The co-executors argued that Sandra’s simultaneous execution of a reciprocal Will containing the same arbitration clause demonstrated her assent. The court rejected this. While a meeting of the minds is not required for a Will to be effective — because a Will is a unilateral disposition of property, not a contract — that principle cuts in the opposite direction for arbitration purposes. Precisely because a Will is unilateral, neither Sandra nor any other interested party was afforded the opportunity to consider or elect to waive their right to proceed in court. The court was not satisfied that the simultaneous execution of reciprocal Wills, without more, established the kind of informed, knowing assent required for a valid arbitration agreement.

2. Inconsistency with the Probate Code

Even if the assent problem could be overcome, the court held that arbitration clauses in Wills are incompatible with New Jersey’s statutory framework for estate administration. The Probate Code, N.J.S.A. 3B:1-1 et seq., vests the Superior Court with comprehensive authority over Will disputes, trust administration, and fiduciary accountings. The court catalogued the relevant provisions, including but not limited to:

  • N.J.S.A. 3B:2-2 grants the Superior Court "full authority to hear and determine all controversies respecting wills, trusts[,] and estates, and full authority over the accounts of fiduciaries, and also authority over all other matters and things as are submitted to its determination under this title."

  • N.J.S.A. 3B:3-17 during probate, the Superior Court "may take depositions to wills[,] admit the same to probate, and grant . . . letters testamentary or letters of administration with the will annexed."

  • N.J.S.A. 3B:3-18 requiring that to "prove the transfer of any property or to nominate an executor, a will must be admitted to probate."

Against this backdrop, the court reaffirmed and expressly adopted what had been an observation in its prior unpublished opinion: “arbitration clauses that eliminate the courts’ expected role in resolving Will disputes are inconsistent with the detailed statutory scheme vesting the superior courts with the authority to adjudicate such issues.” Accordingly, enforcement of an arbitration clause in a testamentary instrument is contrary to both the Probate Code and New Jersey’s contract principles. The court held:

We conclude enforcement of an arbitration clause in a testamentary instrument is contrary to the court’s role underlying the Probate Code and inconsistent with our State’s contract principles.

What This Means for Estate Planning in New Jersey

The Hekemian decision settles a question that had been lingering in New Jersey estate practice for years. Estate planners and their clients should take note of several practical implications.

  • Arbitration clauses in Wills are unenforceable in New Jersey. Regardless of a testator’s intent, an arbitration provision in a Last Will and Testament cannot compel beneficiaries, heirs, or other interested parties to resolve their disputes outside of court. Any such provision should be considered a nullity.

  • Testamentary trusts are also covered. The court’s holding extends to disputes concerning trusts created under a Will, not merely the Will itself. The arbitration clause in the Will purported to cover disputes “regarding the interpretation of this Will and the trusts created hereunder” — both were held unenforceable.

  • The result is the same regardless of mutual assent. Even if a testator and their spouse executed reciprocal Wills containing identical arbitration clauses, and even if the surviving spouse received benefits under the Will, that is insufficient to establish the knowing, voluntary waiver of court rights required under Atalese.

  • Inter vivos trusts are a different question. The Hekemian decision addresses testamentary instruments — Wills and trusts created by Wills. Arbitration clauses in standalone inter vivos trusts, which are contractual instruments, may be treated differently.

  • Will disputes belong in court. Beneficiaries and interested parties who find themselves in estate disputes in New Jersey have a right to litigate those disputes in the Superior Court, Chancery Division, Probate Part — and a testator cannot take that right away through a provision buried in their Will.

A Practical Note for Families

For families navigating an estate dispute in New Jersey, the Hekemian decision is significant. If a co-executor or trustee attempts to invoke an arbitration clause in a Will to divert your dispute out of court, that clause is unenforceable. You are entitled to pursue your claims — whether exceptions to an accounting, removal of a fiduciary, or other relief — in the Superior Court under the full protections of New Jersey law.

For those in the estate planning process, this decision underscores the importance of working with an experienced New Jersey estate planning attorney who stays current with developments in the law. Estate planning documents should reflect the current legal landscape, not aspirational provisions that courts will not enforce.

When Liens Collide: DDD Can Collect Now, Medicaid Must Wait

When Liens Collide: DDD Can Collect Now, Medicaid Must Wait

by | Apr 7, 2026 | Estate Administration, Estate Planning, Guardianship, Intestate Estate (No Will), Last Will and Testament, Legal Bulletin, Medicaid, Medicaid Estate Recovery, Medicaid Planning, Medicaid Updates, Trusts

A decision from the New Jersey Appellate Division published June 17, 2025 (In the Matter of G.W.) has clarified a critical and previously unsettled area of law concerning public benefit liens. The court held that a lien issued by the Division of Developmental Disabilities (DDD) is immediately enforceable, while a Medicaid lien cannot be collected until the beneficiary’s death — a distinction with significant consequences for estate planning.

The Background

Gabrielle W., an adjudicated incapacitated adult, received residential services funded by both DDD and Medicaid. When she inherited $600,000 from her sister’s estate, Arc of Bergen and Passaic Counties, her court-appointed property guardian, sought to protect her Medicaid eligibility by transferring those funds to a special needs trust. But standing in the way was a $1,052,304 lien from DDD for the cost of her care — a lien DDD sought to enforce immediately.

The trial court declined to enforce the DDD lien, ruling instead that Medicaid’s future estate recovery rights had priority. The court reasoned it was in Gabrielle’s best interest to preserve her Medicaid eligibility and protect the trust. But on appeal, the Appellate Division disagreed.

The Court's Holding

The Appellate Division reversed the lower court’s order, emphasizing that DDD liens are enforceable immediately under N.J.S.A. 30:4-80.1. These liens attach to the property of a living person who receives services from DDD. On the other hand, Medicaid liens can only be asserted posthumously, pursuant to N.J.S.A. 30:4D-7.2, and only against the estate of the deceased Medicaid recipient.

The court concluded there is no statutory conflict: both liens can coexist, but they operate on distinct timelines. In the case of a living person like Gabrielle, DDD had the only legally viable lien. Medicaid’s recovery rights would not ripen until Gabrielle’s death.

Why This Matters

This case is a clear warning to guardians, trustees, and estate planners: Inherited assets cannot be shielded from DDD repayment obligations simply by invoking Medicaid's future claim rights. If a client receives services from DDD and comes into money, the DDD lien must be addressed promptly — either by repayment or through the statutory compromise process. The court also made clear that a “best interests” argument cannot override a legislatively mandated lien. Courts must enforce the statutes as written.

Planning Tip

If you have a loved one who receives public benefits like Medicaid or services from DDD, careful estate planning is essential. Leaving them an inheritance outright — even with good intentions — can jeopardize their benefits and trigger immediate repayment obligations. Instead, consider using special needs trusts or other protective planning tools to ensure their continued eligibility and long-term care without exposing them to liens or disruptions in services.

The G.W. case illustrates precisely what happens when protective planning is absent. Gabrielle's sister died intestate — without a will — which meant the $600,000 passed to Gabrielle outright under New Jersey's laws of intestate succession. There was no will directing those funds into a Special Needs Trust, no advance coordination with an elder law attorney, and no mechanism to receive the inheritance in a protected form. The result was an immediate lien enforcement proceeding that consumed the entirety of the inheritance and left nothing for Gabrielle's ongoing care needs.

Had Gabrielle's sister executed a will with proper special needs planning, she could have directed her estate — or the portion intended for Gabrielle — into a third-party Special Needs Trust. Unlike a first-party trust funded with the beneficiary's own assets, a third-party SNT is established with someone else's money and carries no Medicaid payback requirement at death. Gabrielle would have received the benefit of those funds without triggering the DDD lien, and without disrupting her Medicaid eligibility.

This is one of the most important and underappreciated points in elder law and disability planning: the person doing the planning is often not the disabled individual, but the family member who intends to leave them something. A parent, sibling, or other relative who has a loved one receiving public benefits should have a will — and that will should account for the beneficiary's disability. Leaving assets outright to a Medicaid or DDD recipient, however well-intentioned, can do more harm than good.

Special Needs Trusts vs. ABLE Accounts in New Jersey: Which One Is Right for Your Family?

Special Needs Trusts vs. ABLE Accounts in New Jersey: Which One Is Right for Your Family?

by | Mar 18, 2026 | Estate Planning, Last Will and Testament, Medicaid, Medicaid Planning, Trusts

Families planning for a loved one with a disability in New Jersey often face the same question: should we set up a Special Needs Trust, open an ABLE account, or both? The answer depends on the individual’s age, the amount of money involved, and the kinds of expenses you need to cover.

Both tools are designed to preserve eligibility for public benefits like Medicaid and Supplemental Security Income (SSI) while allowing a person with disabilities to have access to additional resources. I’ve previously covered SSI Medicaid eligibility in New Jersey in detail. I’ve also given an overview of NJ ABLE accounts and how they can help a family save, while preserving SSI eligibility.  This post focuses on Special Needs Trusts and ABLE accounts, and how to choose between the two tools — or use them together.

What Is a Special Needs Trust?

A Special Needs Trust (SNT) is a legal trust designed to hold assets for the benefit of a person with a disability without disqualifying them from means-tested government benefits. The key is that the trust — not the individual — owns the assets, so they do not count toward Medicaid or SSI resource limits.

There are two main types of Special Needs Trusts in New Jersey:

  • First-Party: Funded with the beneficiary’s own assets — for example, a personal injury settlement or an inheritance received directly. Must be established before the beneficiary turns 65. Upon the beneficiary’s death, Medicaid must be reimbursed for benefits paid.
  • Third-Party: Funded with assets belonging to someone other than the beneficiary — typically a parent, grandparent, or other family member. No age restriction. No Medicaid payback requirement upon death, which makes this the preferred option for family estate planning.

A trustee — often a family member, attorney, or professional trust company — manages the trust and makes distributions on the beneficiary’s behalf. Distributions must supplement, not replace, government benefits. This means trust funds generally cannot be used for food or shelter without impacting SSI and Medicaid eligibility.

What Is an ABLE Account?

An ABLE account (Achieving a Better Life Experience) is a tax-advantaged savings account available to individuals whose disability began before age 46 (increased from 26 effective January 1, 2026). New Jersey’s program is administered through NJ ABLE. For a full breakdown of eligibility and benefits, see my earlier post: NJ ABLE Accounts: Preserving Benefits for Individuals with Disabilities.

Key features of an ABLE account:

  • Funds are not counted as assets for Medicaid or SSI purposes (up to $100,000 for SSI)
  • Annual contribution limit: $20,000 in 2026 (with additional contributions allowed under the ABLE to Work Act for working beneficiaries)
  • Total account balance cap: $305,000 in New Jersey
  • The account holder — or their legal representative — controls the account directly
  • Can be used for a broad range of qualified disability expenses, including housing, transportation, education, health, and more

When a Special Needs Trust Makes More Sense

A Special Needs Trust is typically the better choice when:

  • The beneficiary is receiving a large sum — such as an inheritance, personal injury settlement, or life insurance proceeds — that exceeds ABLE account contribution or balance limits
  • The disability onset was at age 46 or older, making the individual ineligible for an ABLE account
  • A family member wants to leave money to a loved one with disabilities as part of their estate plan (a third-party SNT is the preferred vehicle here)
  • Complex financial management is required and a professional trustee is needed
  • The family wants to avoid the Medicaid payback requirement upon death — only possible with a third-party SNT

When an ABLE Account Makes More Sense

An ABLE account is typically the good choice when:

  • The individual’s disability began before age 46
  • The goal is to set aside modest amounts for day-to-day supplemental expenses without the cost and complexity of a trust
  • The individual wants direct control over their own funds
  • The family wants a simple, low-cost planning tool to complement existing benefits
  • Contributions from family members, friends, or employers are expected over time

Can You Use Both?

Yes — and for many families, using both tools together is an effective strategy. A common approach:

  • Establish a third-party Special Needs Trust in the parents’ estate plan to receive larger inheritances or life insurance proceeds
  • Open an ABLE account for the beneficiary to handle smaller, recurring disability-related expenses with greater flexibility and direct access

The two tools complement each other well. The SNT handles larger, longer-term assets with professional oversight. The ABLE account provides the beneficiary with day-to-day financial autonomy without jeopardizing benefits.

Important Caution: Get it Right from the Start

Both Special Needs Trusts and ABLE accounts involve rules that — if not followed carefully — can inadvertently disqualify a person from Medicaid or SSI. With a Special Needs Trust in particular, improper distributions (for example, paying for food or rent directly) can reduce SSI benefits dollar for dollar.

Before establishing either tool, consult with a New Jersey elder law or special needs planning attorney to ensure the structure is right for your family’s situation.

Final Thoughts

There is no one-size-fits-all answer. The right tool depends on your loved one’s age, the assets involved, and your long-term planning goals. For families with a child or adult with disabilities in New Jersey, both a Special Needs Trust and an ABLE account deserve a place in the conversation. Read my earlier post on NJ ABLE Accounts for a deeper dive into how ABLE accounts work.

New Jersey’s Revised Uniform Fiduciary Access to Digital Assets Act

New Jersey’s Revised Uniform Fiduciary Access to Digital Assets Act

by | Jun 24, 2025 | Estate Administration, Estate Planning, Last Will and Testament, Power of Attorney, Probate

The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA) was enacted in New Jersey to provide clarity and structure for fiduciaries seeking access to a decedent’s or incapacitated person’s digital assets. The law balances the privacy expectations of individuals with the practical needs of estate and trust administration.

Key Definitions

  • Digital Asset: An electronic record in which an individual has a right or interest, such as email accounts, social media profiles, cryptocurrency, or cloud-stored files.

  • Fiduciary: A person authorized to act on behalf of another, including:

    • Executor or administrator of an estate

    • Agent under a power of attorney

    • Trustee

    • Court-appointed guardian

  • Custodian: A person or business that stores digital assets (e.g., Google, Meta, Apple).

Fiduciary Access Categories

RUFADAA applies to four types of fiduciaries:

  1. Personal Representatives (Executors/Administrators) – May access the digital assets of a deceased individual.

  2. Agents under a Power of Attorney – May manage digital assets during the principal’s lifetime, if specifically authorized.

  3. Trustees – May access digital assets titled in the name of the trust.

  4. Court-Appointed Guardians – May access digital assets with court approval.

Hierarchy of Access Authorization

RUFADAA establishes a three-tiered system to determine fiduciary authority:

1. Online Tools

If the digital service provider (such as Google or Facebook) offers a tool for account holders to direct post-death access (e.g., Google’s Inactive Account Manager or Facebook’s Legacy Contact), that direction overrides any conflicting instructions in a will, trust, or power of attorney.

2. Legal Documents

If no online tool exists or is used, instructions provided in estate planning documents control. These documents must specifically authorize access to digital assets; general powers are not sufficient.

3. Terms of Service Agreements (TOSAs)

If neither an online tool nor legal documents address the issue, the service provider’s Terms of Service Agreement governs access. Most TOSAs restrict access to authorized users only.

Scope of Access

Fiduciaries may seek access to:

  • Content: The actual substance of communications (e.g., emails, messages), which requires explicit authorization.

  • Catalog Information: Metadata such as sender, recipient, and timestamps, which may be accessible with broader authority.

Service providers may limit access to catalog information if content access is not authorized.

Steps for Fiduciaries to Request Access

Fiduciaries must usually provide the custodian with:

  1. A written request for access;

  2. A certified copy of the death certificate (for estates);

  3. Documentation of fiduciary authority (e.g., letters testamentary, power of attorney, or court order); and

  4. A copy of the will, trust, or other document granting digital access rights.

In some cases, custodians may require a court order to release certain information.

Custodian Protections

  • Custodians are not liable for acts done in good faith under RUFADAA.

  • They are permitted to request additional documentation or a court order.

  • Custodians may limit access to specific portions of data or provide it in alternative formats.

User Privacy and Federal Law Compliance

  • If the account holder prohibited disclosure via legal documents or online tools, fiduciaries cannot override that instruction.

  • RUFADAA does not override federal privacy laws, such as the Stored Communications Act or the Computer Fraud and Abuse Act.

Practical Takeaways for New Jersey Residents

  • Estate planning documents should expressly authorize access to digital assets.

  • Individuals should consider using online tools offered by service providers to designate account access.

  • To avoid confusion and uncertainty, make sure there is no conflict between estate planning documents and online tools offered by service providers

  • Appointing a digital executor or agent can help ensure smooth management of online accounts.

  • Without proper planning, loved ones may be unable to access essential financial or personal information stored digitally.

Digital Asset Estate Planning in New Jersey: Don’t Forget Your Digital Life

Digital Asset Estate Planning in New Jersey: Don’t Forget Your Digital Life

by | Jun 17, 2025 | Estate Administration, Estate Planning, Last Will and Testament, Power of Attorney

In today’s world, estate planning isn’t just about physical property or bank accounts. Increasingly, individuals are amassing significant digital assets—social media accounts, cryptocurrency, online business platforms, cloud storage, digital photos, frequent flyer miles, and more. If you’re a New Jersey resident, planning for these assets is not only prudent but essential. Without a clear plan, your digital legacy could be lost, inaccessible, or mismanaged after death.

What Are Digital Assets?

Digital assets include any online account or digital file that you own or control. This could be:

  • Financial accounts like PayPal, Venmo, cryptocurrency wallets, and investment apps
  • Social media and email (Facebook, Instagram, Gmail)
  • Subscriptions (Netflix, Dropbox, Amazon)
  • Online businesses or monetized content on platforms like Etsy, YouTube, or Substack
  • Intellectual property such as domain names, eBooks, or digital art stored online

New Jersey and the Revised Uniform Fiduciary Access to Digital Assets Act

New Jersey has adopted Revised Uniform Fiduciary Access to Digital Assets Act(RUFADAA), a law that governs how fiduciaries (like executors of a will or agents under a power of attorney) can access your digital assets. Under RUFADAA:

  1. You can authorize or restrict access to digital assets via a will, trust, or power of attorney.
  2. If no specific authorization exists, the service provider’s Terms of Service Agreement usually controls access.
  3. Some platforms allow you to name a “legacy contact” (Facebook for example) or designate what happens to your data after death (Google Inactive Account Manager).

Why You Need a Digital Estate Plan

Without proper planning, loved ones may not be able to access essential financial records or sentimental content. Worse, your identity or business could be compromised if unattended digital accounts remain open.

A digital estate plan ensures:

  • Access to critical financial information
  • Protection of sensitive personal data
  • A clear path for digital legacies or online businesses
  • Fulfillment of your final wishes, including digital memorials or deletions

Steps to Include Digital Assets in Your Estate Plan

  1. Inventory your digital assets. List your accounts, usernames, and approximate value or importance.
  2. Choose an agent. Name someone you trust to handle these assets—this can be part of your will or separate, depending on complexity.
  3. Document access. Store passwords securely using a password manager and include instructions in a secure letter of instruction or digital vault.
  4. Provide legal authorization. Update your estate planning documents to explicitly authorize access to digital assets in accordance with RUFADAA.
  5. Review terms of service. For major accounts, check if the provider allows you to set legacy preferences.

A Final Word

In New Jersey, failing to address your digital assets in your estate plan can create legal uncertainty and emotional stress for your loved ones. As technology continues to evolve, so too must our approach to estate planning. If you’re unsure where to begin, consult an estate planning attorney who understands the unique challenges and opportunities posed by digital assets.

Inheriting a House in New Jersey: What Happens When Co-Owners Disagree?

Inheriting a House in New Jersey: What Happens When Co-Owners Disagree?

by | May 21, 2025 | Estate Administration, Estate Planning, Intestate Estate (No Will), Last Will and Testament, Probate

If you inherit a house in New Jersey with someone else and you disagree on whether it should be sold, the situation will likely fall under property law and co-ownership rules. Here’s an overview of your options:

1. Try to Negotiate or Reach an Agreement

  • Discuss the situation with the co-owner to try and reach a compromise. This could involve buying out the other person’s share, agreeing to rent the property, or setting terms for its sale.
  • Mediation with a neutral third party can help if direct negotiation isn't successful.

2. Partition Action (Court Involvement)

  • If you cannot agree, either party can file a lawsuit for partition in the Superior Court of New Jersey.
  • A partition action can result in one of two outcomes:
    • Partition by Sale: The court orders the property to be sold, and the proceeds are divided between the co-owners according to their ownership shares.
    • Partition in Kind: If feasible, the court physically divides the property. However, this is rare for residential properties because splitting a house isn’t practical.
  • Legal costs will be involved, and the court's decision is binding.

3. One Party Buys Out the Other

  • If one person wants to keep the house, they could offer to buy out the other’s share. An appraisal may be needed to determine the home's fair market value.
  • This option avoids the costs and delays of a court proceeding.

4. Co-Ownership Agreement

  • If you and the co-owner can reach a temporary agreement, you might create a written contract outlining how the property will be managed, sold, or divided in the future.

5. Sale Through Agreement

  • If both parties ultimately agree to sell, you can jointly list the house for sale and split the proceeds according to your ownership percentages.

Key Considerations:

  • Legal Counsel: It’s advisable to consult a attorney experienced in New Jersey law. They can guide you through negotiations, prepare documents, or represent you in court if necessary.
  • Costs: If the matter goes to court, both parties may incur legal and court fees.
  • Time: A partition action can take months or even years to resolve.
  • Property Expenses: Until the matter is resolved, co-owners are typically jointly responsible for property taxes, mortgage payments (if applicable), and upkeep.