Court Opinion

ID: 2780481
Source: CourtListenerOpinion
Date Created: 2015-02-19 17:03:41.598963+00
Date Added: 2024-06-11T12:00:14.101602
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN THE MATTER OF THE TRUST                  )
UNDER THE WILL OF ELIZABETH                 )
WILLIAMS VALE FOR THE BENEFIT               )       C.A. No. 7662-VCP
OF FREDERIC B. ASCHE, JR.                   )

                            MEMORANDUM OPINION

                        Dated Submitted: November 12, 2014
                          Date Decided: February 19, 2015

Matthew P. D‟Emilio, Esq., COOCH AND TAYLOR, P.A., Wilmington, Delaware;
Attorneys for Petitioner PNC Bank, N.A.

Neil R. Lapinski, Esq., GORDON FOURNARIS & MAMMARELLA, P.A.,
Wilmington, Delaware; Attorneys for Respondents Lisa Asche Mittnacht, E. Craig Asche,
E. Vale Asche Elkins, Frederic B. Asche, III, and Franz M. Asche.

Joel Friedlander, Esq., FRIEDLANDER & GORRIS, P.A., Wilmington, Delaware; Eric
Gambrell, Esq., AKIN, GUMP, STRAUSS, HAUER & FELD LLP, Dallas, Texas;
Attorneys for Interested Parties Texas Capital Bank, as Independent Executor of the
Estate of Frederic B. Asche, Jr., and Mary Susan Barnhill, as Independent Executrix of
the Estate of Sarah Patricia Asche.

PARSONS, Vice Chancellor.
       This matter arises out of a dispute between potential will beneficiaries. The will,

being challenged elsewhere in terms of validity, exercised a power of appointment over a

Delaware trust in favor of the testator‟s wife. Probate Court No. 2 of Dallas County,

Texas (the “Texas Court”), admitted the will to probate without objection. To admit a

will to probate, a Texas probate court must issue an order declaring that the will has the

necessary formalities and the testator was “of sound mind” when he executed it—i.e., an

order that the will was valid. Texas, however, allows will contests challenging the will‟s

validity for up to two years after entry of an initial order declaring the will valid.

Currently, the Texas Court is holding proceedings that challenge the validity of the

testator‟s will underlying this case. A jury verdict has declared the will invalid. Appeals

from that verdict remain pending.

       After a will is admitted to probate, a Texas probate court appoints an independent

executor who oversees the administration of the estate. Under Texas law, an independent

executor has the authority to gather the estate assets with minimal court supervision.

Here, after the appointment of the executor of the testator‟s estate, but before the trust

assets were distributed, the testator‟s wife passed away.      The wife‟s executrix now

requests that the trust assets be distributed to the wife‟s estate as was required under the

testator‟s will that was admitted to probate. Under the wife‟s will, a university medical

center would receive the trust assets. If, however, the Texas will contest ultimately

invalidates the will, the testator‟s children may receive the trust assets instead. The

Delaware trustee petitioned this Court under 10 Del. C. § 6504(2) for an order directing it

                                             1
to distribute the trust assets to the wife‟s estate or, in the alternative, to be authorized to

hold and invest those assets in accordance with its asset preservation policies.

       On January 29, 2013, this issue was submitted to a Master in Chancery. She

entered a Final Report on July 19, 2013. In her Final Report, the Master ordered the

Delaware trustee to continue to hold the assets and to invest them in accordance with its

asset preservation policies. The wife‟s executrix has filed exceptions to the Final Report.

Under Court of Chancery Rule 144, I review the Master‟s determinations de novo. For

the reasons that follow, I conclude that the trustee should refrain from distributing the

trust assets until the Texas courts finally determine the validity of the will. While the will

contest is pending, I authorize the trustee to invest the trust assets in accordance with its

asset preservation policies.

                                I.       BACKGROUND1

                                       A.       Facts

       On August 28, 1961, Delaware resident Elizabeth Williams Vale (“Mrs. Vale”)

died. In her will, she established a trust for the benefit of her daughter, Grace Vale Asche

(“Mrs. Asche”). Upon Mrs. Asche‟s death, the principal of the trust was to be divided

into three equal shares for each of Mrs. Vale‟s grandchildren. Accordingly, when Mrs.

Asche died on March 21, 2001, the principal was divided and placed into three trusts.2

1
       The parties do not dispute the facts underlying the petitioner‟s claim and a more
       detailed version of those facts can be found in the Master‟s Report. In the Matter
       of Vale for Asche, 2013 WL 3804584, at *1-4 (Del. Ch. July 19, 2013).
2
       Am. Pet. ¶ 2.

                                              2
The portion of the trust that Mrs. Vale left to Frederic B. Asche, Jr. (“Tex”)3 is the

subject of this litigation (the “Trust”). Under the terms of Mrs. Vale‟s will, Tex had the

ability to direct the disposition of the Trust assets when he died through a general

testamentary power of appointment.4 If Tex failed to exercise his power of appointment,

his issue would receive the Trust assets per stirpes.

       Tex died on October 6, 2011. He was survived by five children—Lisa Asche

Mittnacht, Frederic B. Asche, III, E. Craig Asche, Franz M. Asche, and E. Vale Asche

Elkins (collectively, the “Default Beneficiaries)—and his wife, Sarah Patricia Asche

(“Sallie”). On October 18, 2011, Sallie filed an application to admit Tex‟s Will to

probate. On November 7, 2011, the Texas Court admitted Tex‟s Will to probate without

objection (the “Texas Order”). The Texas Order stated that Tex‟s Will met the necessary

formalities and that Tex was “of sound mind” when he executed his will. At the time the

Texas Order was entered, however, there had been no contested proceedings about the

will‟s validity. But, Texas probate law allows interested parties to challenge the validity

of a will for up to two years after it is admitted to probate.5

3
       Because several of the relevant persons have the same last name, first names are
       used herein for clarity and without intending disrespect or familiarity.
4
       A general testamentary power of appointment means that Tex could direct the
       Trust assets to whomever he wanted by will.
5
       Tex. Estates Code Ann. § 256.204 (West 2015) (formerly Tex. Prob. Code Ann.
       § 93); see also Master‟s Report 4-5. During the course of the administration of
       Tex‟s estate, Texas recodified its probate code, effective January 1, 2014. The
       relevant code for this proceeding is the Texas Probate Code.

                                               3
      Under the terms of Tex‟s Will,6 Tex exercised his power of appointment in favor

of his wife, Sallie.7 Sallie passed away on March 5, 2012. In a Texas probate court

proceeding, Mary Susan Barnhill was appointed independent executrix of Sallie‟s estate

(the “Executrix”). Under the terms of Sallie‟s will, Baylor University Medical Center of

Dallas ultimately would receive the Trust assets. The Default Beneficiaries, however, are

contesting the validity of Tex‟s Will in the Texas Court. If the Default Beneficiaries

successfully invalidate Tex‟s Will, the purported exercise of the power of appointment in

Tex‟s Will would be nullified, and, absent any other will by Tex to the contrary, the

Default Beneficiaries would receive the Trust assets.

      When the Executrix was appointed to administer Sallie‟s estate, she requested that

PNC Bank, N.A. (“PNC”) turn over the Trust assets pursuant to Tex‟s Will. Under the

terms of the Trust, however, PNC and two individual co-trustees must act collectively as

Trustee. At the time of Tex‟s death, Sallie and Tex‟s son Franz were the individual co-

trustees. After Sallie‟s death, therefore, her position as co-trustee had to be filled to

enable the Trustee to take any action. PNC made numerous requests of Franz to appoint

6
      As admitted to probate, “Tex‟s Will” consisted of a will dated October 10, 2005, a
      first codicil dated June 5, 2007, and a second codicil dated September 9, 2011.
7
      Master‟s Report 3.

                                            4
a successor co-trustee. Instead, Franz resigned. Without co-trustees, PNC claims that it

has been unable to take any action involving the Trust assets.8

                               B.      Procedural History

       On June 28, 2012, PNC petitioned this Court pursuant to 10 Del. C. § 6504(2) for

an order authorizing PNC to distribute the Trust assets to the Executrix. On August 1,

2012, the Default Beneficiaries challenged the validity of Tex‟s Will by filing a will

contest in the Texas Court (generally, the “Will Contest”). Thereafter, PNC amended its

petition asking, in the alternative, that this Court authorize PNC to invest the Trust assets

without co-trustees and in conformance with PNC‟s policies for conservation and

preservation of assets.9

       On January 29, 2013, the issue was submitted to a Master in Chancery. The

Master filed a Draft Report on April 29, 2013, to which both parties filed exceptions.

After briefing on the exceptions, the Master filed her Final Report on July 19, 2013 (the

“Master‟s Report”). On July 26, 2013, the Executrix filed exceptions to that report.

After full briefing, I heard argument on the exceptions on July 16, 2014 (the

“Argument”). Following the Argument, I requested comment on a further development

8
       This situation is particularly problematic from a financial standpoint because a
       third of the value of the Trust is invested in one publicly traded company.
       Master‟s Report 7.
9
       Am. Pet., Prayers for Relief, ¶¶ A-B.

                                               5
in the Texas Court.10 The parties submitted letters on that development in November

2014. On December 31, 2014, the Texas Court issued an order in the Will Contest

invalidating Tex‟s Will,11 and appeals currently are pending.12

       In accordance with Rule 144, I have reviewed de novo the evidence and arguments

presented with respect to the issues decided in the Master‟s Report. This Memorandum

Opinion reflects my findings of fact and conclusions of law on the issues presented. For

the reasons stated herein, I reach the same conclusion that the Master did.

                             C.       Parties’ Contentions

       The Executrix makes three principal arguments in support of her contention that

the Master erred. Those arguments are that: (1) not enforcing the Texas Order violated

the Full Faith and Credit Clause because the Texas Order is a final judgment; (2) these

10
       JP Morgan filed an action in the Texas Court similar to the one PNC brought here
       under 10 Del C. § 6504(2), in which it asked the Texas Court for instructions on
       trust assets it held that arguably were affected by Tex‟s Will. Although the Texas
       Court heard arguments similar to those presented in this Court, it ultimately did
       not accept the Executrix‟s position. Order Granting Mot. for Instructions, No. Pr-
       13-667-2 (Probate Ct. No. 2 Dall. Cty. Sept. 9, 2014) (ordering the trustee to
       distribute funds pursuant to a trust instrument rather than Tex‟s Will).
11
       In re: Estate of Frederic B. Asche, Jr., No. Pr-11-3533-2, at 2 (Probate Ct. No. 2
       Dall. Cty. Dec. 31, 2014) (“IT IS THEREFORE ORDERED that the November 7,
       2011 Order admitting [Tex‟s Will] to probate is hereby RESCINDED and SET
       ASIDE.”(bold typeface omitted)).
12
       On January 22, 2015, Tex‟s executor filed its notice of appeal. Notice of Appeal at
       1, In re: Estate of Frederic B. Asche, Jr., No. Pr-11-3533-2 (Probate Ct. No. 2
       Dall. Cty. Jan. 22, 2015). On January 30, 2015, the Executrix filed her notice of
       appeal. Notice of Appeal at 1, In re: Estate of Frederic B. Asche, Jr., No. Pr-11-
       3533-2 (Probate Ct. No. 2 Dall. Cty. Jan. 30, 2015).

                                             6
proceedings constitute an impermissible collateral attack on the Texas Order; and (3) not

enforcing the Texas Order impedes the Executrix in violation of Texas law.

       The Default Beneficiaries staunchly defend the Master‟s Report. Specifically,

they contend that the Master correctly determined that: (1) the Texas Order is not final in

the sense that it is entitled to full faith and credit; (2) this case is not a collateral attack;

and (3) having the Trustee hold the Trust assets until after the Will Contest concludes

does not impede the Executrix.

                                    II.      ANALYSIS

A.      The Texas Order Is Not an Enforceable Final Judgment as to the Validity of
                                      Tex’s Will.

       The Executrix argues that Texas law provides that an order admitting a will to

probate is an enforceable final judgment, which therefore is entitled to full faith and

credit. The Full Faith and Credit Clause13 requires state courts to give the same effect to

foreign judgments as the state that rendered the judgment. Full faith and credit has long

been understood to incorporate the concepts of res judicata and collateral estoppel.14

13
       U.S. Const. art. IV § 1. There also is a related statue: the Full Faith and Credit Act
       (“FFCA”). 28 U.S.C. § 1738 (2012). The FFCA requires that “„all courts [must]
       treat a state court judgment with the same respect that it would receive in courts of
       the rendering state.‟” In re Nat’l Auto Credit, Inc. S’holders Litig., 2004 WL
1859825, at *2 (Del. Ch. Aug. 3, 2004) (quoting Matsushita Elec. Indus. Co. v.
       Epstein, 516 U.S. 367, 373, (1996)).
14
       E.g., Pyott v. La. Mun. Police Emps. Ret. Sys., 74 A.3d 612, 615 (Del. 2013).
       “Delaware courts have used the terms res judicata and claim preclusion
       interchangeably and distinguish them from collateral estoppel and issue
       preclusion. The Restatement (Second) of Judgments also contrasts claim
       preclusion and the narrower concept of issue preclusion. The section on Scope
                                               7
       Here, the Texas Order is not entitled to full faith and credit as to the validity of

Tex‟s Will because the Texas Order does not reflect an actual adjudication of that issue.

Accordingly, admitting the will to probate did not collaterally estop the Default

Beneficiaries.15 Similarly, the Default Beneficiaries were not precluded from filing the

Will Contest because of res judicata.16 If admitting Tex‟s Will to probate precluded

future litigation over its validity, there could be no Will Contest. In fact, the Will Contest

consisted of a new trial, in front of a jury, to determine the validity of Tex‟s Will.17 Thus,

because the Texas Order is not entitled to res judicata or collateral estoppel effect, the

Texas Order is not entitled to full faith and credit in this case as an adjudication of the

validity of Tex‟s Will.

       states: „The principle underlying the rule of claim preclusion is that a party who
       once has had a chance to litigate a claim before an appropriate tribunal usually
       ought not to have another chance to do so. A related but narrower principle—that
       one who has actually litigated an issue should not be allowed to relitigate it—
       underlies the issue of issue preclusion.‟” Advanced Litig., LLC v. Herzka, 2006
WL 4782445, at *8 n.54 (Del. Ch. Aug. 10, 2006); see also Hendry v. Hendry,
       2006 WL 1565254, at *8 n.77 (Del. Ch. May 26, 2006).
15
       Cf. Thompson v. Deloitte & Touche, L.L.P., 902 S.W.2d 13, 16 (Tex. App. 1995)
       (concluding that the statutory period for contesting the will had run and the order
       admitting the will to probate was res judicata); Martinez v. Arredondo, 406
S.W.2d 513, 514 (Tex. Civ. App. 1966) (holding that a will contest operates as res
       judicata against a second will contest).
16
       In re Estate of Blevins, 202 S.W.3d 326, 329 (Tex. App. 2006) (concluding that
       even if an interested party is served with notice of the proceeding to admit the will
       to probate, he is not precluded from filing a will contest within the two-year
       statute of limitations).
17
       See Tex. Estates Code Ann. § 55.002 (West 2015) (formerly Tex. Prob. Code Ann.
       § 21) (“In a contested probate or mental illness proceeding in a probate court, a
       party is entitled to a jury trial as in other civil actions.”).
                                              8
       The Executrix cites In re Cochran’s Estate18 for the proposition that “Delaware

courts have denied efforts to freeze assets pending determination of a will contest.” 19 In

In re Cochran’s Estate, John Cochran devised a life estate to his wife and the remainder

to his children who survived him. The will also provided that if any of his children did

not survive him, the child‟s issue would receive the property in the child‟s place.20 When

Cochran executed his will, one of his six children had died leaving behind four children.21

This Court held that because Cochran‟s child had died with issue before Cochran

executed his will, Cochran would have had to name the child‟s issue specifically in his

will to devise property to them effectively.22 After determining the parties‟ rights under

the will, the Court ordered the estate partitioned and denied a motion to stay. In denying

a stay, the Court held that, “A legal question based on undisputed facts has been properly

raised in a tribunal competent to decide it, and it is not ignoring or trespassing on the

functions and powers of other courts for this court to decide the question.”23

       Thus, Cochran’s Estate involved a situation where this Court had jurisdiction both

to interpret the will and to order the partition. Here, in contrast, this Court‟s role simply

18
       85 A. 1070 (Del. Ch. 1913).
19
       Executrix‟s Opening Br. 10.
20
       Cochran’s Estate, 85 A. at 1070-71.
21
       Id. at 1071.
22
       Id. at 1073.
23
       Id.

                                             9
is to instruct PNC what it should do. The ultimate content of those instructions depends

on how the Texas courts finally resolve the Will Contest. Unlike that proceeding, the

litigation before this Court does not involve an adjudication of the parties‟ rights under

Tex‟s Will. Thus, the decision in Cochran’s Estate is unhelpful to the Executrix‟s

argument.       Indeed, under the reasoning of Cochran’s Estate, this Court would be

trespassing on the function of the Texas courts if it were to authorize the Trustee to

distribute the Trust assets while the issue of the validity of Tex‟s Will, which affects the

rights to those assets, is being litigated in the Texas courts.24

                    B.     This Proceeding Is Not a Collateral Attack.

       Next, the Executrix argues that failing to instruct PNC to transfer the Trust assets

to her constitutes a collateral attack upon the Texas Order. A collateral attack is an

attempt to “avoid, defeat, evade, or deny the force and effect of a final order or judgment

in an incidental proceeding other than by appeal, writ of error, certiorari, or motion for

new trial.”25

24
       See Sibert v. Pettyjohn, 2009 WL 5150288, at *1 (Del. Ch. Dec. 15, 2009)
       (granting stay of a partition action while the family court determined title to the
       property in a divorce proceeding).
25
       Fransen v. Conoco, Inc., 64 F.3d 1481, 1487 (10th Cir. 1995) (citation omitted)
       (internal quotation marks omitted); see also State v. Kamalski, 429 A.2d 1315,
       1320 (Del. Super. 1981) (noting that only judgments by courts lacking jurisdiction
       may be collaterally attacked).

                                               10
       The Executrix cites Anonymous v. Anonymous26 as support for its assertion that

this Court cannot decide the validity of another state‟s order because it would be an

impermissible collateral attack.    In Anonymous, a husband sought an annulment in

Delaware on the grounds that his wife still was married to her first husband because a

Texas order divorcing them purportedly was invalid.27 The court held, “Relief on this

ground must be obtained, under the law of [Texas], in some direct proceeding, as by

motion, appeal or action in equity.”28

       The decision in Anonymous v. Anonymous is distinguishable, however, because

this Court is not being asked to avoid, defeat, evade, or deny the force and effect of the

Texas Order regarding an issue as to which that order would be dispositive under Texas

law. The Default Beneficiaries, like the husband in Anonymous, must go to Texas to

challenge the validity of the Texas Order. In fact, as regards the validity of Tex‟s Will,

the Default Beneficiaries have done that in the Will Contest. What is at issue here, and

not addressed in Anonymous, is what happens to disputed property while a party directly

attacks a foreign order in that foreign jurisdiction. The Executrix reads Anonymous as

precluding any court except a Texas court from preventing the distribution of disputed

property while such a direct attack is pending. Under that interpretation, only a Texas

26
       85 A.2d 706 (Del. Super. 1951), aff’d sub nom. Du Pont v. Du Pont, 90 A.2d 468
       (Del. 1952).
27
       Id. at 711.
28
       Id. at 713.

                                           11
court could have enjoined the wife in the Anonymous case from disposing of marital

property while a direct attack on the divorce order was pending. Consistent with the

conclusion the Master reached in her report,29 I am convinced that the prohibition on

collateral attacks is not so broad as to produce that result.

C.       This Proceeding Does Not Impede the Executrix in Violation of Texas Law.

       The Executrix also argues that failing to distribute the Trust assets to Sallie‟s

estate impedes the Executrix in violation of Texas law. The Executrix asserts that in this

regard the Master‟s holding interferes with the Texas Legislature‟s scheme for

adjudicating wills, which limits judicial oversight of independent executors.

       Under Texas probate law, Section 145(h) provides:

              When an independent administration has been created, and
              the order appointing an independent executor has been
              entered by the county court, and the inventory, appraisement,
              and list aforesaid has been filed by the executor and approved
              by the county court or an affidavit in lieu of the inventory,
              appraisement, and list of claims has been filed by the
              executor, as long as the estate is represented by an
              independent executor, further action of any nature shall not be
              had in the county court except where this Code specifically
              and explicitly provides for some action in the county court.30

29
        “Taken to its logical conclusion, the Executrix‟s argument would mean that if an
       independent executor attempts to gather an asset, the ownership of which is
       disputed, no court in the land can enter an order respecting that asset, other than
       the court that appointed the executor. . . . [S]uch a conclusion would be both
       absurd and inefficient.” Master‟s Report 16-17.
30
       Tex. Estates Code Ann. § 402.001 (West 2015) (formerly Tex. Prob. Code Ann.
       § 145(h)).

                                              12
Section 145 consistently has been interpreted as limiting judicial oversight to minimize

the costs of probating wills.31 Under Section 145, the independent executor is vested

with the power to act as if he was acting pursuant to an order of the court. 32 Furthermore,

the Executrix argues, “It is [her] power and duty to administer the assets of the Estate,

and it is not the province of the court to impede the Executrix of this obligation.”33 Texas

Probate Code Section 37, in relevant part, provides:

               [U]pon the issuance of letters testamentary or of
               administration upon any such estate, the executor or
               administrator shall have the right to possession of the estate
               as it existed at the death of the testator . . . and he shall
               recover possession of and hold such estate in trust to be
               disposed of in accordance with the law.34

Texas courts have interpreted Section 37 as vesting the independent executor with not

just a right, but a duty to gather the assets of the estate.35

31
       See, e.g., Corpus Christi Bank & Trust v. Alice Nat’l Bank, 444 S.W.2d 632, 634-
       35 (Tex. 1969) (“[The Texas Supreme Court] has recognized this rationale in
       saying that the general intent of Sec. 145 of the Probate Code is to free the
       „independent executor‟ from the control of the court, except where the Code
       specifically and explicitly provides otherwise.” (citation omitted) (internal
       quotation marks omitted)).
32
       Smith v. Hodges, 294 S.W.3d 774, 778 (Tex. App. 2009) (“An independent
       executor may, without order of the probate court, do any act that an ordinary
       executor or administrator could do with or under an order of the probate court.”).
33
       Executrix‟s Opening Br. 14-15.
34
       Tex. Estates Code Ann. § 101.003 (West 2015) (formerly Tex. Prob. Code Ann.
       § 37).
35
       Bloom v. Bear, 706 S.W.2d 146, 147 (Tex. App. 1986).

                                                13
       The parties did not cite any case, however, discussing how Section 37—and

therefore the Executrix‟s right to gather estate assets—applies in connection with a will

contest, as exists in this case. The Court‟s research has not revealed any such case either.

       Here, the dispute over whether the Trust assets are part of Sallie‟s estate turns on

the outcome of the Will Contest. Moreover, Texas probate law appears to provide

specifically and explicitly for will contests in the county court within two years after the

entry of an order, such as the Texas Order. In this case, the Default Beneficiaries are

litigating in Texas whether Tex‟s Will is valid, a necessary precondition to the Trust

assets becoming part of Sallie‟s estate. In the absence of a final determination as to

whether the Trust assets were in Sallie‟s estate when she died, I am not persuaded that the

Executrix is vested with the power to gather the disputed Trust assets. PNC, therefore,

should hold the assets until the Texas courts determine who is entitled to those assets.

       Similarly, I conclude that instructing PNC not to distribute the Trust assets to

Sallie‟s estate is neither a collateral attack on the order appointing the Executrix nor a

violation of the Full Faith and Credit Clause. The Executrix‟s right to the Trust assets

depends on whether they are part of Sallie‟s estate.36 Until the Texas courts determine

the Will Contest, and through it, reach a final resolution as to whether Tex validly

exercised his power of appointment, the Executrix does not have an enforceable right to

the disputed Trust assets because they may not be part of Sallie‟s estate.

36
       See Tex. Prob. Code Ann. § 37 (West 2013).

                                             14
                  D.      The Executrix’s Miscellaneous Arguments

       The Executrix also predicts dire consequences if this Court confirms the Master‟s

Report. She argues that if wills are not enforceable until after they are entitled to full

faith and credit, then no executor may rely on the initial probate order until after a will

contest or after the statute of limitations has run, which could take years. My ruling in

this Memorandum Opinion, however, is not likely to impede an executor of a Texas

estate from gathering estate assets pursuant to Section 37. It is for the executor to decide

whether to distribute assets when he knows a potential dispute is on the horizon. And,

while the Executrix argues that failing to distribute the Trust assets here will create

uncertainty for executors in the future, that outcome seems unlikely. Texas law makes

clear that an executor has the right to gather assets in the testator‟s estate at the time of

her death. An executor‟s right to gather assets is not absolute, however. If questions

exist as to whether certain assets were part of the testator‟s estate when she died, and the

rights to those assets are the subject of an ongoing will contest, the executor‟s right to

gather those assets may be limited.37

37
       Here, if Tex‟s Will is invalid, his purported exercise therein of his power of
       appointment would be ineffective, and the Trust would not be part of Sallie‟s
       estate. Because the Texas courts currently are determining that issue in the
       context of deciding whether Tex‟s Will is valid, I consider it inappropriate to
       distribute the Trust assets to the Executrix at this time. The Executrix repeatedly
       argues that the Texas Order already provides that the Trust assets are part of the
       estate, but as discussed supra, that order did not actually adjudicate the validity of
       Tex‟s Will.

                                             15
       The Executrix also argues that the Master erred in considering potential prejudice

to the Default Beneficiaries. According to the Executrix, it is “wholly irrelevant to the

determination of the matters in this case what the executrix will or might do with the

Trust assets upon distribution.”38 This position comports with the Executrix‟s overall

theory in this litigation, which is: (1) the Texas Order is a final judgment; (2) under the

Texas Order, the Trust assets go to Sallie‟s estate; (3) the Texas Order takes precedence

over the Will Contest in terms of estate administration; and (4) refusing to enforce the

Texas Order would violate the Full Faith and Credit Clause, inject unnecessary

uncertainty into the Texas probate system, and generally undermine the independence of

executors and, possibly, the sovereignty of the state of Texas.

       Notwithstanding the Executrix‟s predictions regarding the adverse effects of the

Master‟s Report—or any decision upholding it—it is the Executrix‟s argument that

ignores real world effects. As the Master correctly observed, the circumstances of this

case are unusual.39 Not surprisingly, therefore, neither party has identified any case law

squarely addressing this specific situation.     Instead, the parties presented arguments

relying on relatively strained analogies, often supported by decades-old case law.

       Having considered the relevant circumstances and the competing arguments, I find

the Executrix‟s position—that the Will Contest is irrelevant to the resolution of this

38
       Executrix‟s Opening Br. 14.
39
       Master‟s Report 17 (“This case arises under the very unusual circumstances in
       which an action contesting the probate of a will in one estate impacts whether a
       particular piece of property is the asset of a second estate.”).

                                            16
case—untenable.     The merits of the Will Contest had not been resolved when the

Executrix argued before the Master. By the time of the Argument before me, a Texas

jury had found Tex‟s Will invalid, but the Executrix still maintained that the Will Contest

should not affect the outcome here.40 Furthermore, as the parties discussed in their

November letters to this Court, the Texas Court recently issued a decision that itself

undercuts the Executrix‟s notion that the Texas Order was entitled to full faith and

credit.41   Notably, the same arguments pressed by the Executrix in this case were

presented to the Texas Court in the other action and that court—which obviously is more

versed in Texas probate law—found those arguments unpersuasive. Even in light of

these circumstances, the Executrix steadfastly maintains that the Will Contest is

irrelevant to the issue before me. In the absence of persuasive authority to the contrary,

however, I find that it would be illogical and inequitable for this Court to order

distribution of the Trust assets to Sallie‟s estate at this time. Accordingly, I hold that the

Master did not err in considering the practical effect of the Executrix‟s arguments.

                                III.     CONCLUSION

       For the foregoing reasons, I direct PNC to hold the Trust assets until after a final

judgment as to which all rights of appeal have been exhausted exists in the Will Contest.

40
       See Final Judgment and Order Admitting Will to Probate and Authorizing Letters
       Testamentary at 1, No. Pr-11-3533-2 (Probate Ct. No. 2 Dall. Cty. Dec. 31, 2014);
       see also Arg. Tr. 6 (“The point is is [sic] this verdict has no effect on the status
       quo as we stand here today.”). The jury verdict was entered on April 16, 2014; the
       Argument before this Court took place on July 16, 2014.
41
       See supra note 10 and accompanying text.

                                             17
In the interim, I authorize PNC to invest the Trust assets consistent with its policies for

asset preservation and conservation.

       IT IS SO ORDERED.

                                            18