January 2016
IMO Ronald J. Mount 2012 Irrevocable Dynasty Trust C.A. No. 10991-VCN (January 21, 2016)
This case was filed on May 5, 2015 by the Trust Protector of the Ronald J. Mount 2012 Irrevocable Dynasty Trust (the “Dynasty Trust”). It seeks a determination regarding the validity of the trust and instructions regarding its proper administration. The larger dispute relates to the Settlor’s son’s contention that three individuals close to the Settlor (including the Settlor’s new wife, his daughter, and the newly appointed Trust Protector of the Dynasty Trust) exercised undue influence over the Settlor in the final stages of his life in order to obtain greater control over his substantial assets. The Dynasty Trust, established in 2012, included the Settlor’s son as a lifetime beneficiary. The son alleges that when the Settlor’s health deteriorated, the Settlor’s caregiver (who eventually became his new wife), daughter, and the newly appointed Trust Protector of the Dynasty Trust, acted as “allies” in an effort to gain control over the Dynasty Trust.
On May 12, 2015, the Settlor’s new wife, the Settlor’s daughter, and the Trust Protector sought probate in Florida of the Settlor’s will as amended by two codicils. On June 1, 2015, the Settlor’s son challenged the will on grounds of undue influence and sought probate of an earlier will. He also petitioned for annulment of the Settlor’s marriage to his new wife, challenged the Settlor's revocable trust on grounds of undue influence, and sought the removal of the new wife, the Settlor’s daughter, and the Trust Protector as fiduciaries for the Settlor’s estate and various trusts.
On July 10, 2015, the Settlor’s son filed his answer and counterclaims in Delaware. In those counterclaims, he repeated many of the allegations that he raised in the Florida matter.
The Delaware Court of Chancery acknowledged that substantial pieces of the wide-ranging litigation between the parties are based in Florida “where substantial discovery has occurred and the proceedings appear to be progressing.”
Perhaps it is notable that neither the Dynasty Trust nor its trustee is a party in the Florida action.
The Settlor’s son moved to stay the action filed in Delaware in favor of the Florida proceedings, arguing that a stay is a “matter committed to the exercise of the Court’s discretion.” The Trust Protector maintained that the son must demonstrate that litigating the case in Delaware would cause “overwhelming hardship” in order to overcome the Trust Protector’s choice of Delaware as the forum to litigate the issues concerning the Dynasty Trust.
The Vice Chancellor first analyzed the stay motion under the first-filed rule. The Vice Chancellor noted that that rule generally instructs a court to respect a plaintiff’s choice of forum unless the defendant can demonstrate that litigating in the forum subjects the moving party “to overwhelming hardship and inconvenience.” That is high standard to overcome and, here, the Court found that the Settlor’s son failed to meet the burden.
The Vice Chancellor then analyzed the factors that could possibly warrant a stay under the forum non conveniens doctrine. After going through those factors, the Vice Chancellor concluded that a stay was not appropriate under that doctrine either and he denied the motion.
The Vice Chancellor did, however, recognize that coordination with the Florida case made a lot of sense and he instructed the parties not to needlessly duplicate efforts. Specifically, the Vice Chancellor added a footnote saying, “Coordination of discovery between the Delaware action and the Florida action should be accomplished by the parties and their counsel. The Court will become involved in coordinating discovery, if necessary.”
Note: This firm represents the trustee of the Dynasty Trust in this matter.
In August of 2015, Delaware adopted 12 Del.C.§ 1311. In so doing, Delaware joined Ohio, Alaska, Arkansas, New Hampshire, Nevada, North Carolina, and North Dakota as one of only a few states that offer testators the option of pre-mortem will validation. Pre-mortem will validation gives testators the ability to compel any will contests during the testator’s lifetime.
The new law provides that a testator must satisfy a notice requirement in order to successfully pre-validate their will. To do so, a testator must notify in writing any person named in the will as a beneficiary, any person with a future interest in the testator’s property if the testator were to die intestate, and any other person the testator wishes to be barred from challenging the validity of the testator’s will. That notice must explain that any contest to the will’s validity must be made within 120 days after the beneficiary’s receipt of notice (unless the testator dies before such 120-day period has elapsed). The notice must include a copy of the testator’s will. If a testator puts a beneficiary or interested party on notice of pre-validation and that person fails to challenge the will’s validity within the requisite 120-day period, then that notified person is barred from later contesting the will’s validity.
