In re Ethel F. Peierls Charitable Lead Unitrust
59 A.3d 464
Del. Ch.2012Background
- Trustees Brian and Jeffrey Peierls petition for orders approving resignations, appointing Northern Trust as successor trustee, confirming Delaware situs, and Delaware law governing administration.
- Trust Agreement provides 6% Unitrust to the Foundation; if Foundation ceases to qualify, successor organizations may receive the Unitrust Amount; trustees can designate alternates.
- Trust expires September 12, 2029; ultimate distributions depend on powers of appointment exercised by Brian or Jeffrey, with Stefan and Derek as presumptive remainder beneficiaries.
- Petition proposes substantial revisions to convert the Trust into a directed trust with an Investment Direction Adviser and a Trust Protector; Northern Trust proposed as sole trustee.
- Petition seeks four advisory declarations and reformation of the Trust; the Court ultimately denies advisory relief, accepts limited jurisdiction for reformation, and does not retain ongoing jurisdiction.
- Court denies reformation on the grounds that convenience or dissatisfaction with administration is not a basis to depart from the settlor’s intent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether advisory declarations are proper relief | Peierls seeks declarations under the Trust to confirm resignations, successor, situs, and law. | Actions are permissible under the Trust agreement and do not require court intervention. | Advisory declarations denied; no live dispute; dismissed without prejudice. |
| Whether the court should reform the Trust | Reformation necessary to implement directed-trust structure. | No basis shown; no grounds like mutual mistake or fraud established. | Reformation denied. |
| Whether the court should retain ongoing jurisdiction over the Trust | Court should oversee administration post-petition. | No ongoing obligations or accountings; jurisdiction limited. | Jurisdiction not retained beyond reformation consideration. |
| Whether changes can be effected without judicial involvement | Trust provisions allow designation and changes without court action. | Same; changes are administrative and can be done by agreement of trustees. | Changes can be effectuated without judicial involvement; petitions on declarations dismissed. |
Key Cases Cited
- Roos v. Roos, 203 A.2d 140 (Del.Ch.1964) (reformation of trusts; equity jurisdiction to reform to original intent)
- Gannett Co., Inc. v. Bd. of Managers of the Del. Criminal Justice Info. Sys., 840 A.2d 1232 (Del.2003) (reversible error to address non-controversial issues; advisory opinions)
- Stabler v. Ramsay, 88 A.2d 546 (Del.1952) (consent to jurisdiction not controlling; need actual dispute)
- Rollins Int'l, Inc. v. Int'l Hydronics Corp., 803 A.2d 660 (Del.1973) (advisory opinions improper when trust agreement contemplates action)