Matter of Frank A. Clemente Two-Year Grantor Retained Annuity Trust

Summary

The Appellate Division, Third Department affirmed a Surrogate's Court decree approving the judicial settlement of an inter vivos trust accounting. The court held that jurisdiction was proper because the trustee resided in New York and was retained after the trustee's death, and it declined to vacate the parties' open-court settlement because the alleged fraud was known or reasonably discoverable before the stipulation.

Holdings

1. The Surrogate's Court had subject matter jurisdiction under SCPA 207 because the trustee resided in New York when the proceeding commenced and during its pendency, notwithstanding that his domicile may have been in Colorado.
2. The Surrogate's Court retained jurisdiction after the trustee died because it had jurisdiction when the trustee petitioned for judicial settlement and the successor trustee voluntarily became a party.
3. The Surrogate's Court properly denied the motion to vacate the settlement because the objectant knew or should have known of the allegedly fraudulent transactions before entering the settlement and failed to exercise due diligence.

Questions Presented

1. Whether the Surrogate's Court had subject matter jurisdiction over the inter vivos trust under SCPA 207 because the trustee resided in New York even though his domicile or mailing address may have been in Colorado.
2. Whether the Surrogate's Court retained jurisdiction over the accounting proceeding after the original fiduciary died and the successor trustee voluntarily became a party.
3. Whether the objectant's open-court stipulation of settlement should be vacated based on alleged fraud where the objectant had access to the relevant evidence before entering the stipulation.

Disposition

affirmed