Published in NH Bar News – web extra (3/20/2017)
On Feb. 15, 2017, the New Hampshire Supreme Court issued a published opinion in Estate of Kathleen Mullin, which expresses some important law on the jurisdiction of courts to determine the composition of trusts and estates.
The case settles that the determination of rights to assets where title is held by a decedent may be resolved by a court other than the court overseeing the administration of an estate. Where the evidence and witnesses to determine the validity of the transfer of assets into a trust are more easily available in another forum, the court supervising the administration may defer to the courts of that forum for a ruling.
At issue in Estate of Mullin was the validity of an inter vivos transfer of real and personal property worth about $2.5 million into a self-settled revocable trust in California by a New Hampshire resident. The decedent had executed with the trust a schedule of assets, but had neither transferred title of the property over to the trust nor executed a pour-over will. A dispute arose between the successor trustee of the trust and the administrator of her estate over whether the assets had been effectively transferred into the trust.
The administrator of the estate filed a motion for declaratory judgment in the 9th Circuit Probate Division Nashua estate administration case seeking a declaration that both legal and equitable title were held by the decedent at the time of her death. The trustee objected, and filed a petition in California seeking a declaration that the property in question belonged to the trustee. The New Hampshire Probate Court (Quigley, J.) ruled that the California Courts were in a better position to determine whether the assets had validly been transferred into the trust.
On appeal, the administrator argued that the New Hampshire courts had exclusive in rem jurisdiction – that the California courts could not determine the ownership interest in the disputed assets, because the New Hampshire courts had already assumed exclusive custody over the property.
The New Hampshire Supreme Court disagreed. Justice Robert Lynn, writing for a unanimous court, held: “That New Hampshire possesses jurisdiction to probate the decedent’s estate does not mean that jurisdiction is necessarily exclusive, nor does it require the court to exercise its jurisdiction (emphasis in original).”
The Supreme Court explained the probate court could “decline to exercise jurisdiction” where another court is a more convenient forum to decide the matter, or where a related matter is already pending. Thus, the Probate Court did not err in “concluding that the California court had jurisdiction to determine what property belonged to the Trust and in not proceeding with the probate of the decedent’s estate until after that determination had been made.”
Copies of the Supreme Court and Circuit Court orders and relevant pleadings are posted in the Pleadings Bank.
Henry Klementowicz practices with McLane Middleton in New Hampshire and Massachusetts and can be reached by email or at(603) 628-1377.