Hanson v. Denckla

[*238] Mr. Chief Justice Warren delivered the opinion of the Court.

This controversy concerns the right to $400,000, part of the corpus of a trust established in Delaware by a settlor who later became domiciled in Florida. One group of claimants, “legatees,” urge that this property passed under the residuary clause of the settlor’s will, which was admitted to probate in Florida. The Florida courts have sustained this position. 100 So. 2d 378. Other claimants, “appointees” and “beneficiaries,” contend that the property passed pursuant to the settlor’s exercise of the inter vivos power of appointment created in the deed of trust. The Delaware courts adopted this position and refused to accord full faith and credit to the Florida determination because the Florida court had not acquired jurisdiction over an indispensable party, the Delaware trustee. - Del. -, 128 A. 2d 819. We postponed the question of jurisdiction in the Florida appeal, No. 107, 354 U. S. 919, and granted certiorari to the Delaware Supreme Court, No. 117, 354 U. S. 920.

The trust whose validity is contested here was created in 1935. Dora Browning Donner, then a domiciliary of Pennsylvania, executed a trust instrument in Delaware naming the Wilmington Trust Co., of Wilmington, Delaware, as trustee. The corpus was composed of securities. Mrs. Donner reserved the income for life, and stated that the remainder should be paid to such persons or upon such trusts as she should appoint by inter vivos or testamentary instrument. The trust agreement provided that Mrs. Donner could change the trustee, and that she could amend, alter or revoke the agreement at any time. A measure of control over trust administration was assured by the provision that only with the consent of a trust “advisor” appointed by the settlor could the trustee (1) sell trust assets, (2) make investments, and (3) participate in any plan, proceeding, reorganization or merger [*239] involving securities held in the trust. A few days after the trust was established Mrs. Donner exercised her power of appointment. That appointment was replaced by another in 1939. Thereafter she left Pennsylvania, and in 1944 became domiciled in Florida, where she remained until her death in 1952. Mrs. Donner’s will was executed Dec. 3, 1949. On that same day she executed the inter vivos power of appointment whose terms are at issue here.[1] After making modest appointments in favor of a hospital and certain family retainers (the “appointees”),[2] she appointed the sum of $200,000 to each of two trusts previously established with another Delaware trustee, the Delaware Trust Co. The balance of the trust corpus, over $1,000,000 at the date of her death, was appointed to her executrix. That amount passed under the residuary clause of her will and is not at issue here.