Arbitrating Inheritance Disputes in Israel: A Practical Guide for Heirs

A deceased parent leaves behind an apartment in Tel Aviv, a bank account, and four adult children across three countries. No one agrees on whether to sell the apartment or who gets it, and two of the heirs have not spoken to each other in years. Four-plus years of Family Court proceedings, conducted entirely in Hebrew with the court record publicly accessible, is nobody's preferred outcome. Can the family take this dispute to private arbitration instead?

The answer is yes, with important caveats about what stays in court. Arbitration of inheritance disputes is legally recognized in Israel and has become more common in recent years, particularly among diaspora families and international estates where confidentiality, English-language proceedings, and faster resolution carry real practical value. This guide explains which disputes qualify, how the process works, what it costs, and where the line is between what arbitrators can decide and what only a court can resolve.

1. What Inheritance Disputes Can Be Arbitrated

Once the probate process is complete and the legal identity of the heirs is established, the remaining disputes between heirs are essentially private civil matters. Like any private civil matter in Israel, they can be submitted to arbitration if all parties consent.

The most common types of inheritance disputes suitable for arbitration include:

• Asset division disagreements. Heirs may agree on who inherits but disagree on how to divide indivisible assets: one heir wants the apartment, another prefers to sell it, a third wants their share converted to cash. These valuation and partition disputes sit comfortably within arbitration.
• Interpretation of will provisions. Where a will contains ambiguous language (for example, a bequest of "the contents of the home" or a clause conditioning a gift on certain behavior), heirs can submit the interpretation question to an arbitrator rather than a judge.
• Estate administrator disputes. When heirs believe an appointed estate administrator (*menahal ha'izavon*) mismanaged assets (sold property below market value, failed to collect a debt, or improperly charged fees), they can often resolve that financial dispute through arbitration if all affected parties agree.
• Heir-agreement implementation. Where heirs reached a written division agreement under Section 110 of the Succession Law 5725-1965 (*heskem ha-yorshim*) but then disagree on how to implement it, an arbitration clause in the original agreement will determine the dispute.
• Business or partnership interests in an estate. When the estate includes a share in a company or partnership governed by a shareholders' agreement containing an arbitration clause, that clause may be invoked when the estate's share creates a conflict among the surviving partners and the heirs.

2. What Cannot Be Arbitrated: Exclusive Court and Registrar Jurisdiction

Not every step in the Israeli succession process can be privatized. Several determinations require state authority and cannot be delegated to a private arbitrator regardless of what the parties agree to.

Obtaining a succession order (*tzav yerusha*). When there is no valid will, a succession order establishes who the legal heirs are and in what proportions. This must be issued by the Inheritance Registrar or, if contested, by the Family Court. An arbitrator has no authority to certify heirship; any purported arbitral award purporting to declare who inherits in the absence of a valid will is unenforceable.

Obtaining a probate order (*tzav kiyum tzava'a*). When there is a will, the probate order confirms its validity and authenticity. This also requires the Registrar or Family Court. Challenges to a will — on grounds of testamentary incapacity, undue influence, or improper execution — are litigated before the Family Court, not before an arbitrator.

Appointing or removing an estate administrator. Under Sections 78 through 102 of the Succession Law 5725-1965, the court appoints and supervises estate administrators. The decision to remove a malfunctioning administrator, expand or limit their authority, or require them to post a security bond is a court decision. An arbitrator cannot appoint an administrator or order their removal.

Determining legal heirship under contested circumstances. Where there is a factual dispute about whether a particular person is a legal heir — for example, whether a child is the biological descendant of the deceased, or whether an adoption was legally recognized — that status determination must be resolved by the Family Court.

Claims by creditors against the estate. Estate creditors are not automatically bound by an arbitration agreement among heirs. If a creditor disputes a debt owed by the deceased, that proceeding follows ordinary civil procedure and cannot be diverted to arbitration without the creditor's consent.

3. The Legal Framework: Succession Law and Arbitration Law

Two statutes govern how inheritance arbitration works in Israel:

The Succession Law 5725-1965 (*Chok HaYerusha*) governs who inherits, how estates are administered, and what rights heirs have. Section 110 is particularly important: it allows heirs to enter into agreements with one another about the division of estate assets, and those agreements bind the parties. Section 114 allows a court to assign specific assets to specific heirs in a partition proceeding, but there is no reason the parties cannot agree privately on the same allocation and memorialize that agreement — including an arbitration clause for future disputes about implementation.

The Arbitration Law 5728-1968 (*Chok HaBorrerut*) governs all private arbitration in Israel. Section 3 requires that the arbitration agreement be in writing. Section 5 allows the court to stay court proceedings when a valid arbitration agreement exists. Section 24 defines the narrow grounds on which an arbitral award can be challenged — which include exceeding authority, procedural unfairness, and contravention of public policy — but not mere disagreement with the outcome. For inheritance matters, the public policy ground occasionally arises where an arbitral award purports to override a mandatory rule of succession (for instance, the reserved share for minor children under Section 55 of the Succession Law) — such an award would not survive a Section 24 challenge.

4. How Inheritance Arbitration Works in Practice

The typical path to inheritance arbitration unfolds in four stages after the succession order is obtained:

Stage 1: Signing the submission agreement (*psak borrerut*). All parties to the dispute must sign a written agreement to arbitrate. The agreement should identify the arbitrator by name or set out a selection mechanism, define the scope of the dispute, specify the language of proceedings and the governing law, and state the timeline for the arbitration to conclude. Where multiple heirs disagree about using arbitration at all, the process cannot proceed without consent. Israeli law provides no mechanism to compel an heir to arbitrate an estate dispute they did not previously agree to arbitrate.

Stage 2: Selecting the arbitrator. Inheritance disputes benefit from an arbitrator who combines legal and practical expertise. Retired Family Court judges, senior attorneys with estate practice experience, and certified estate valuators are common choices. The ICCA maintains a roster of qualified arbitrators. The parties may also agree on a three-person panel for high-value estates, though the cost and time associated with a three-arbitrator panel may not be proportionate to simpler disputes.

Stage 3: The proceedings. The arbitrator holds an initial case management session to set the hearing schedule, determine what documents each party must produce, and identify any expert witnesses needed — typically a real estate appraiser or a business valuator. Hearings are then scheduled and conducted privately, often at the arbitrator's office or at the ICCA hearing center. For diaspora families, hearings increasingly take place by video link. The arbitrator has wide procedural discretion: unlike a court judge, they are not bound by the formal rules of evidence, though they must give each party a fair opportunity to present their case.

Stage 4: The award (*psak din borrerut*) and enforcement. The arbitrator issues a written, reasoned award that specifies how the estate assets are to be divided, who pays what to whom, and any conditions on implementation. The award is filed with the District Court under Section 23 of the Arbitration Law and, once filed, is treated as a court judgment for enforcement purposes. If a party refuses to comply — for example, an heir who was ordered to sign a property transfer deed and refuses — the court can issue a specific performance order or appoint a court official to sign on their behalf.

5. Drafting a Sound Arbitration Submission Agreement

The submission agreement is the constitutional document of the arbitration — if it is poorly drafted, the arbitration will be slow, expensive, and vulnerable to challenge. Key provisions to address:

• Scope clause. Define exactly which disputes are submitted. "All disputes arising from the division of the estate of [name]" is clearer than "disputes about the estate." If certain assets or claims are carved out — for instance, a pending insurance claim that will be litigated separately — the carve-out must be explicit.
• Arbitrator selection. Name the arbitrator, or specify an institution and the process for selection within a fixed number of days. Avoid leaving selection open-ended; deadlocks over arbitrator selection are a common source of delay and court intervention.
• Language. State that proceedings will be conducted in English (or Hebrew, or both). Witnesses who do not speak the chosen language should have translation provided.
• Governing law. Israeli law governs Israeli succession and property. For estates with cross-border elements, the agreement should specify which country's law governs any foreign asset disputes.
• Costs allocation. Israeli courts typically award costs to the prevailing party. Consider specifying the default: either each party bears their own costs, or costs follow the event, or the arbitrator has discretion.
• Confidentiality clause. The arbitration process is private by default in Israel, but adding an explicit confidentiality clause — covering the existence of the proceeding, any documents produced, and the award itself — prevents a losing heir from publishing the award or using it to pressure other family members.
• Finality clause. Under Section 21B of the Arbitration Law, parties can agree to give the arbitrator the powers of an appeal court or explicitly waive the right to appeal to the court on points of law. This is worth considering for estate matters where finality is more important than having a legally perfect outcome.

6. Rabbinical Court (Beit Din) as a Form of Inheritance Arbitration

Many observant Jewish families in Israel — and some diaspora families — resolve estate disputes through a *beit din* (rabbinical court) rather than through the civil courts or a civil arbitrator. Under Israeli law, a rabbinical court that acts on the basis of a written submission agreement (*shtar berurut*) signed by all parties is treated as a private arbitral tribunal under the Arbitration Law 5728-1968. Its decision is filed with and enforced by the civil courts.

A beit din proceeding applies Jewish law (*halacha*) to the division of the estate. Halachic succession rules differ from Israeli civil succession law in important respects — most significantly, daughters historically received different shares than sons in halachic succession, and a surviving wife's rights under civil law may differ from her entitlements under strict halachic rules. Parties who choose beit din arbitration should understand that the arbitrator will apply halachic principles, which may diverge from the civil outcome they would have obtained in Family Court.

Two practical limitations constrain beit din arbitration for estate matters. First, all parties must voluntarily sign the *shtar berurut*; non-Jewish heirs or heirs who object to beit din jurisdiction cannot be compelled to participate. Second, the foundational probate steps — obtaining the succession order or probate order — must still go through the Inheritance Registrar or Family Court. The beit din handles the downstream division, not the preliminary establishment of legal heirship.

7. Advantages of Arbitration for Diaspora and International Estate Disputes

Estate disputes involving foreign heirs carry particular practical burdens in court. Every pleading must be served abroad, translated documents must be authenticated, heirs often cannot attend hearings in Israel, and the process plays out in Hebrew over several years. Arbitration addresses most of these pain points directly.

On language, the submission agreement can specify English as the language of proceedings. An Israeli Family Court judge will conduct hearings in Hebrew and require Hebrew translations of all foreign documents; an arbitrator operates under whatever terms the parties set.

On logistics, arbitration hearings increasingly take place via video conference. This removes the requirement for diaspora heirs to travel to Israel for each session, which in a court proceeding is genuinely unavoidable.

On privacy, Family Court proceedings are closed to the public in estate matters but judgments may be published in anonymized form and the court record is accessible to the parties and their legal representatives. An arbitration leaves no public footprint unless a party files a challenge in court. For wealthy or prominent families, that matters.

On arbitrator selection, the parties choose someone with the right mix of Israeli law knowledge and, where relevant, familiarity with the home country's legal concepts. That flexibility does not exist in court — you get the judge assigned to you.

On speed, the Family Court's backlog means waiting months for an initial case management hearing. An arbitration can begin substantive proceedings within weeks of all parties signing the submission agreement.

8. Risks and Limitations to Consider

Arbitration's advantages come with real tradeoffs that heirs should understand before committing to the process.

Consent requirement. Every heir who is to be bound must sign the submission agreement. If one heir refuses, whether strategically to preserve a more favorable court option or simply out of stubbornness, the arbitration cannot proceed without a pre-existing arbitration clause agreed to in writing before the dispute arose. For most estate disputes, no such clause exists in advance, so an uncooperative heir can effectively block the private process.

No interim relief against third parties. An arbitrator's power extends only to the parties who signed the submission agreement. If estate assets are held by a bank or by a third-party custodian who refuses to release them, the arbitrator cannot order that third party to act. A court application is needed for third-party enforcement, including freezing orders against bank accounts or property held in the deceased's name.

Mandatory succession rules cannot be arbitrated away. Israel's Succession Law contains provisions that protect certain beneficiaries regardless of what the heirs agree. The rights of minor children, the surviving spouse's share under intestate succession, and the rights of heirs who are legally incapacitated cannot be modified by an arbitral award. An award that purports to do so will be set aside by the court on public policy grounds under Section 24(7) of the Arbitration Law.

Costs are shared upfront. Unlike court proceedings where the winning party can recover costs, arbitration fees are typically paid by the parties at the outset regardless of outcome. In a bitterly contested arbitration, a party who ultimately wins may still have spent NIS 100,000 or more in non-recoverable fees.

Limited grounds for appeal. The flip side of finality is that a clearly wrong arbitral award is very difficult to correct. Section 24 of the Arbitration Law does not permit a court to review the merits of the arbitrator's decision. Only procedural irregularities, excess of authority, and public policy violations qualify as grounds for challenge. An heir who believes the arbitrator misapplied the law or misvalued an asset has essentially no recourse.

Frequently Asked Questions

Adv. Eli Shimony

Licensed Israeli Attorney

Adv. Shimony advises diaspora families and foreign nationals on Israeli estate administration, succession disputes, and private arbitration as an alternative to Family Court proceedings. He represents heirs in both the probate phase and in arbitrations over asset division.

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