In re Peierls Family Inter Vivos Trusts
77 A.3d 249
| Del. | 2013Background
- This is Delaware Supreme Court review of five inter vivos Peierls trusts (1953, 1957, 1975) and companion testamentary and charitable trusts; the petitions sought to reform administration and declare Delaware law and situs for the trusts.
- Trust instruments specify New York law for administration (1953, 1953s) and New Jersey law for administration (1957); 1975 trusts govern under New York law for administration but no fixed situs.
- Petitions sought resignation of current trustees, appointment of Northern Trust as sole trustee, Delaware as situs, Delaware governance of administration, and court-supervised reform under Rules 100-103; none of these changes occurred because Delaware law did not govern administration at present.
- Trusts have not been administered in Delaware; current trustee positions and situs remained unsettled pending reform and appointment, with Texas and New York connections for administration.
- Court concluded Delaware law does not presently govern administration of the trusts and affirmed the Court of Chancery’s denial of reform and jurisdiction to declare Delaware situs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What law governs administration of the 1953/1975 trusts | Peierls seek Delaware law governing administration via change in situs | Chancery applied Delaware conflict rules and found Delaware law not controlling | Delaware law does not presently govern administration of the 1953/1975 trusts. |
| Does changing the place of administration alter the governing law | Changing administration place could shift governing law to Delaware | Restatement allows change if implied/express intent; but court held broader review needed | Authority to change administration law may arise from place-of-administration changes, not limited to specific circumstances. |
| Can the Petitions be granted to reform the instruments | Reform to Delaware law and administration structure warranted | Reformation requires applicable law governing administration; Delaware law does not apply | Court refused reform under the governing-law regime actually applicable (Texas/New York) for administration. |
| Whether Delaware may accept jurisdiction and declare situs | Delaware should accept jurisdiction and declare situs for unified administration | Jurisdiction and situs improper while trusts not in Delaware and administration not under Delaware law | Delaware declined to accept jurisdiction; situs not declared at this time. |
Key Cases Cited
- Annan v. Wilm. Trust Co., 559 A.2d 1289 (Del. 1989) (choice of law for trust construction remains effective when situs changes)
- In re Peierls Family Inter Vivos Trusts, 59 A.3d 471 (Del.Ch. 2012) (Delaware Chancery decision cited for prior context and holding on governing-law issues)
- Wilmington Trust Co. v. Wilmington Trust Co., 24 A.2d 309 (Del. 1942) (early guidance on trust administration and governing-law concepts)
- Wilmington Trust Co. v. Wilmington Trust Co., 24 A.2d 309 (Del. 1942) (foundational discussion on implicit/explicit choice of law and administration)