Hanson v. Denckla

The facts of Hanson v. Denckla are complicated.

Dora Donner, while domiciled in Pennsylvania, established a trust in Delaware.  She put some money in the trust; by the time of her death, the trust was worth about $400,000. She appointed herself the beneficiary of the trust during her lifetime, meaning that she would receive the money that the $400,000 earned for as long as she lived.  The trust allowed her to designate the beneficiary of the trust's assets upon her death at a later time, and to change that designation as she saw fit. Later, Donner moved to Florida, and while in Florida, she executed an instrument effectively (through the creation of still more trusts) designating two of her grandchildren -- the children of Daughter #1 -- as the beneficiaries of the trust upon her death.  She executed these documents in Florida and mailed them to the Delaware trustee.

While in Florida, she also executed her will (outlining what would happen upon her death to the assets that she did not put into the trust), naming Daughter #1 as her executrix and leaving her non-trust possessions (worth $1 million) to be paid via her will equally to Daughters #2 and #3. After living eight years in Florida, during which time her income included checks (represented the money that her $400,000 trust earned) that the Delaware trustee mailed to her at her Florida address, Donner passed away.

Daughters #2 and #3, having received $500,000 each from the will, wanted more.  They filed suit in Florida state court claiming that the appointment of the two grandchildren as beneficiaries of the Delaware trust was invalid.  If the court agreed, then the $400,000 that had gone to the trust would revert back to Donnor, and, because Donnor was dead, that money would become part of her "estate" (her property upon her death), and would thus be divided equally among Daughters # 2 and #3.  Under the Florida rules of civil procedure (which do not concern us here), the Florida case could not proceed unless the Delaware trustee was included in the litigation, and that depended on whether the Florida court could exercise personal jurisdiction over the Delaware trustee.  The Florida court found that it could exercise jurisdiction over the Delaware trustee and ruled in favor of Daughters #2 and #3.  Eventually, the Supreme Court of Florida upheld both decisions.

Meanwhile, Daughter #1 had filed a separate suit in Delaware after the Florida litigation began but before judgment had been entered, and the Delaware state court ruled that the Delaware trusts were valid. The Delaware Supreme Court affirmed, holding that the Florida judgment did not prevent the Delaware court from proceeding because Florida lacked jurisdiction over the Delaware trustee.