## Facts

- A Quebec-domiciled couple executed an antenuptial agreement selecting Quebec law and requiring the husband to provide support and establish a $125,000 trust for the wife and children; the husband’s father guaranteed the $125,000 donation.
- After the husband inherited a large fortune, he created an inter vivos trust for $1,000,000 with income to his wife for life and remainder to their children.
- The trust instrument was prepared in New York; the couple signed in Canada; a New York trustee accepted the trust in New York; and New York securities forming the corpus were delivered to the trustee in New York for administration there.
- The trust stated it was in lieu of the earlier $125,000 antenuptial provision.
- Years later, the husband suffered financial losses and, to obtain credit, agreed to sue to set aside the trust and pledge the corpus as collateral, asserting Quebec law barred post-marriage enlargement of antenuptial donations and substantial interspousal transfers.
- The husband entered involuntary bankruptcy, and his bankruptcy trustee was substituted as plaintiff seeking to invalidate the trust and bring the corpus into the bankruptcy estate.

## Issues

1. Whether the validity and effect of an inter vivos trust of personal property delivered to and administered by a New York trustee are governed by New York law or by Quebec law as the spouses’ domicile and the law referenced in their antenuptial agreement.
2. Whether Quebec restrictions on modifying/enlarging antenuptial donations after marriage invalidate a later $1,000,000 trust funded with New York personalty and administered in New York.
3. Whether the settlor, and thus his bankruptcy trustee, could revoke or rescind an executed inter vivos trust based on asserted failure of consideration or related equitable grounds.

## Decision

- The Court of Appeals affirmed the Appellate Division judgments dismissing the complaints and upheld the trust.
- New York law governed the validity and effect of the trust because the trust res was New York personalty delivered to a New York trustee for administration in New York.
- Quebec marital restrictions did not invalidate the completed New York disposition of New York personal property placed in trust under New York law.
- The trust was an executed inter vivos trust with no reserved power of revocation and no sufficient ground for rescission; therefore, neither the settlor nor his bankruptcy trustee could revoke it or reach the corpus for creditors.

## Legal Principles

- The validity and effect of an inter vivos trust of personal property are determined by the law of the jurisdiction where the property is situated and the trust is administered, particularly when the trustee and administration are located there.
- Foreign marital-property or antenuptial-contract restrictions do not automatically control or invalidate a completed trust of local personalty validly created and administered under local law.
- An executed voluntary conveyance in trust generally requires no consideration and is irrevocable absent a reserved power of revocation or a recognized equitable basis for rescission (e.g., fraud, mistake, or a qualifying failure of promised consideration).
- A bankruptcy trustee succeeds only to the debtor’s rights; if the settlor retained no revocation power or beneficial interest in the corpus, creditors cannot reach the trust res through the trustee.

## Conclusion

The court upheld a $1,000,000 inter vivos trust administered in New York, applying New York law to validate the completed transfer of New York personalty and holding the trust irrevocable and beyond the reach of the settlor’s bankruptcy trustee despite Quebec-based objections tied to an antenuptial agreement.


Hutchison v. Ross, 262 N.Y. 381 (1933)