DEFINITION OF TERMS
What is “Probate”?
In Hawaii, probate is a judicial process which distributes the estate of the deceased (“decedent”). It may be formal or informal. The “Informal Probate” is usually left to simple estates with one heir, and a family member files it with the registrar, not a judge. It terminates automatically one year after it begins. The downside is that the personal representative is not discharged judicially and there is no judicial approval of the distribution of the estate. Although an informal probate is cheaper, it is not the way to go with a medium or large estate and the possibility of a conflict between family members. Then, “Formal Probate” will give the personal representative approval, finality and a release of personal liability. It is for this reason that I recommend formal probates.
The last type of probate is not a probate at all. It is called a “Small Estates Affidavit” and may be used to recover the decedent's property from any institution as long as the total estate of the decedent was under $100,000 and the person signing the affidavit is the personal representative or the highest priority person under the laws of intestacy. It does not involve the court. There are probates for property in the State of Hawaii when the decedent died out of the State; these are called “Ancillary Probates.”
What is “Arbitration”?
Arbitration is a non-judicial proceeding before a neutral person or persons selected by the parties to a contract (written or oral). Arbitrators are often, although not necessarily, attorneys. The selection may be made voluntarily or by the terms specified in the contract. The arbitrator will require certain documents from the parties before the arbitration to familiarize him/herself with the facts in dispute, and an arbitration date will be set. At the arbitration both sides will have an opportunity to present their cases, put on their witnesses, and present their documents as they would at trial. It feels like a trial, except there is no jury and no courtroom. At the end the arbitrator may ask the parties to submit their closing arguments orally or in writing, and he/she will render a written decision some time later. Arbitrations are binding and therefore the rulings may not be appealed. The clear benefit is that the dispute is over. The only exception to the binding rule is when the arbitration is done pursuant to the Court Annexed Arbitration Program, and then either party may appeal under certain terms of that program.
Whereas litigation of disputes in court may take several years, arbitrations are usually completed in 1 year or less. Many people want the finality. I always strongly advise clients that by agreeing to binding arbitration they are giving up their right to appeal an adverse ruling and their right to a trial by jury. Both of these are important rights and waiving them must be considered carefully.
What is “Mediation”?
Mediation, which is often court ordered unless both parties agree to it, is a process of mutual agreement facilitated by people who are trained to settle disputes. The parties may be involved in a lawsuit or may just be at odds and looking for someone to help. Sometimes the views are absolutely opposed to each other, in which case only very skilled mediators can make the parties agree. There are times, although very few, when parties refuse to settle or budge no matter how skilled the mediator. Most people, however, when they realize how much continued litigation will cost, how long it will take, and the emotional/physical toll it will take on them, decide to end the case by compromising. The parties draft their own agreement, which means they have control over the outcome. They sign the agreement voluntarily, but agree to abide by its terms or have to pay the other parties’ attorney’s fees if they do not. I believe that mediation is an essential process in the resolution of insoluble conflicts.
Poorly Drafted Contracts
I am asked frequently to help people out of big problems involving money, property or business which occurred because they thought they could just prepare a simple one-page agreement by themselves, avoiding the expense of an attorney. I am not trying to make money for myself here. I cannot count the number of times I have been simply unable to help someone out of the rut they got themselves into when they forgot to put in a clause indemnifying them from liability for the mistakes of others; limiting the guarantee of remedial work when the customer had not paid them for the previous work; attaching to a construction contract the necessary disclosure form to enable the contractor to obtain a mechanic’s lien when the owner doesn’t pay; forgot to put in a clause about interest to be charged on unpaid balances; forgot to provide for the confidentiality of customer names, addresses and phone numbers which are then sold to the public by the purchaser of a business; forgot to include a non-competition clause that would ensure the survival of the original business being sold to another one, etc. It is obvious that attorneys know the essential provisions of contracts which will protect their clients; anyone who tries to save a few dollars drafting their own contract would be well-advised to reconsider.
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