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SUPREME COURT OF LOUISIANA No. 97-CC-1718

IN RE: HOWARD MARSHALL CHARITABLE REMAINDER ANNUITY TRUST

******************** ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, THIRD CIRCUIT, PARISH OF CALCASIEU ********************

KNOLL, J.* We granted writs in the instant case to determine whether Louisiana has jurisdiction over the succession of a Texas domiciliary, whose only property at the time of his death consisted of undisbursed income from two Louisiana inter vivos trusts. For the following reasons, we determine that Louisiana does not have jurisdiction over the succession of J. Howard Marshall, II. FACTS AND PROCEDURAL HISTORY Decedent, J. Howard Marshall, II, (Mr. Marshall) was an extremely wealthy attorney and businessman who was domiciled in Houston, Texas. He died on August 4, 1995. In the years preceding his death, Mr. Marshall transferred all of his personal assets into a series of inter vivos trusts in an attempt to avoid the necessity for probate. The vast majority of Mr. Marshall's assets were transferred to the J. Howard Marshall, II, Living Trust (Living Trust). In addition, Mr. Marshall created a second trust, the

*

Johnson, J., not on panel. Rule IV, Part 2, Sec.3.

Howard Marshall Charitable Remainder Annuity Trust (Charitable Trust) to fund his charitable pledges and donations. The Charitable Trust was funded by an interest bearing note in the amount of $2,950,000, payable to J. Howard Marshall, II, by his son, E. Pierce Marshall. Mr. Marshall was an income beneficiary under the terms of both trust agreements. The Living Trust provided: "During and throughout [Mr. Marshall's] lifetime, Trustee shall pay over to [Mr. Marshall] sufficient income to maintain [Mr. Marshall's] standard of living." The Charitable Trust states: The Trustee shall pay to J. Howard Marshall, II (sometimes referred to as the Recipient) in each taxable year of the Trust during the Recipient's life an annuity in the amount of One Hundred Ninety-four Thousand Seven Hundred Dollars ($194,700). Both trusts contained a provision authorizing the trustee to invade the corpus or principal of the trust if necessary to maintain the income streams provided for in the trusts. The instant dispute concerns the distribution of the principal of the Charitable Trust. By the terms of the trust agreement, following the death of Mr. Marshall the principal was to be distributed as follows: DISTRIBUTION TO CHARITY. Upon the death of the Recipient, the Trustee shall distribute all of the then principal and income of the trust (other than any amount due Recipient or Recipient's estate under

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Louisiana Law