In the Matter of PEIERLS FAMILY TESTAMENTARY TRUSTS.
Submitted: July 10, 2013.
Court Below: Court of Chancery of the State of Delaware, Case No.16810.
Upon appeal from the Court of Chancery.
Peter S. Gordon (argued), Gordon, Fournaris & Mammarella PA, Wilmington, Delaware, for appellant.
Collins J. Seitz (argued), Seitz Ross Aronstam & Moritz LLP, Wilmington, Delaware, for appellee.
Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS, and RIDGELY, Justices, constituting the Court en Banc.
STEELE, Chief Justice:
This Opinion is one of a trilogy of opinions, issued concurrently, addressing issues arising out of Petitions, filed by members of the Peierls family, requesting the Court of Chancery to accept jurisdiction over, and then modify, thirteen (13) trusts created during the period 1953 through 2005. None of these trusts were created or settled under Delaware law, and none were ever administered in Delaware. The Petitioners sought relief under recently-adopted Court of Chancery Rules 100-103, inclusive, which were designed to create an orderly procedure for entertaining petitions to modify a trust. No respondent was named in the Petitions, which the Court of Chancery denied on various grounds, including lack of jurisdiction. The Petitioners appealed to this Court, which appointed Collins J. Seitz, as amicus curiae to brief and argue in opposition to the Petitions.
This Opinion, in No. 11, 2013, addresses the issues arising out of the seven (7) Peierls family testamentary trusts. Our opinions in the companion cases, Nos. 12 and 13, 2013, respectively, address the charitable trust created by Ethel F. Peierls in 1994 and the five (5) Peierls inter vivos trusts. For the reasons next discussed, we affirm in part and reverse in part the judgment of the Court of Chancery.
I. FACTUAL AND PROCEDURAL HISTORY
The Vice Chancellor's opinion describes in abundant detail the facts regarding the
various trusts and parties. Below, we recite only the facts that are essential to our rulings.
A. The Seven Testamentary Trusts
In his will dated June 30, 1960, supplemented by two codicils, Edgar S. Peierls, the father of Appellants Brian E. Peierls and E. Jeffrey Peierls, created two trusts. One trust was established for the benefit of Brian and the other for the benefit of Jeffrey. Edgar Peierls died on May 5, 1962 while a resident of New Jersey, where his will was also probated. Jeffrey is the sole current beneficiary of his trust while Brian and his children, Stefan and Derek, are the current beneficiaries of Brian's trust. By their terms, the trusts each require three trustees (two individuals and one institution). Currently, Brian, Jeffrey, and Northern Trust, a Delaware corporation, serve as trustees for both trusts. There is conflicting evidence about whether Philip J. Hirsch also serves as a trustee. The will's language contains no choice-of-law provision pertaining to the trusts. The Peierls' Petition asserts that New Jersey has been the situs of the trusts and that New Jersey law has governed the administration of the trusts since their inception. Moreover, the trusts are currently subject to the jurisdiction of the Superior Court of New Jersey, as evidenced by that court's order dated March 16, 2001 approving an intermediate accounting of the trusts and granting other relief. On September 13, 2012, the New Jersey court also issued a Succeeding Trustee Short Certificate (the " Certificate" ) identifying the trustees who accepted trusteeships of the trusts. Among those trustees was Northern Trust, a Delaware corporation. Consistent with the Vice Chancellor's opinion, we refer to this group of trusts as the " 1960 Trusts."
Jennie N. Peierls, Appellants' grandmother, established a second pair of trusts in her will dated November 18, 1969, modified by a codicil dated November 22, 1972. She established one trust for the benefit of Brian and the other for the benefit of Jeffrey. Jennie Peierls died on January 6, 1974 while a resident of New York, where her will was probated. Jeffrey is the sole current beneficiary of his trust, while Brian and his children, Stefan and Derek, are the current beneficiaries of Brian's trust. By the terms of the will, the trusts each require three trustees (two individuals and one institution). Currently, Jeffrey, Malcolm A. Moore, and U.S. Trust Company of Texas serve as trustees of both trusts. The will adopts no choice-of-law provision for the trusts. The Peierls' Petition asserts that New York was the original situs of the trusts and that New York law initially governed their administration. Appellants further explain that in a September 23, 1999 Order, a Texas Probate Court accepted jurisdiction over the trusts and moved the situs of the trusts from New York to Texas. The Texas court's order also approved the substitution of U.S. Trust Company of Texas as trustee for U.S. Trust Company of New York. Appellants then returned to the New York court and on March 29, 2000, obtained an order officially transferring the trusts' situs from New York to Texas and approving the new corporate trustee. In 2001, the Texas court issued an order declaring that Texas law governs the administration of the trusts while New York law continues to govern the validity and construction of the trusts. Consistent with the Vice Chancellor's opinion, we refer to this group of trusts as the " 1969 Trusts."
Brian's wife, Elizabeth Peierls, created three trusts in her will dated April 4, 2005. Elizabeth Peierls died on June 28, 2005, but Appellants have not provided any ...