This case involves a dispute over the ownership of real property located on Via Regla formerly owned by decedent Kenneth Liebler. Kenneth, who passed away in October 2012, had executed a revocable trust in 1985 and the Via Regla property was transferred to the 1985 Trust.
Kenneth then executed an irrevocable trust in 2009 (the “2009 Trust”) which stated, “I transfer to my Trustee the property listed in Schedule A, attached to this agreement.” The sole asset listed on Schedule A was the Via Regla property.
However, Kenneth did not transfer title to the Via Regla property by a deed from the 1985 Trust to the 2009 Trust. This was an apparent oversight.
After Kenneth passed away, his daughter Melanie Carne filed a petition to confirm the validity of the 2009 Trust. A grandson, Dillon Hasting, opposed the petition and argued that the 2009 Trust was not valid because Kenneth had not properly transferred title to the Via Regla property and that property was the only asset in the trust. Nancy Worthington (Kenneth's former live-in companion) also opposed the petition on similar grounds.
The trial probate court ruled in favor of Worthington and Hasting which meant the Via Regla property would not be left to the daughter. Daughter Melanie filed an appeal. The Court of Appeal reversed the trial court and ruled in favor of Melanie. The appellate court held that the language in the 2009 Trust was sufficient to convey the property to the 2009 Trust, and Kenneth was not required to execute a deed.
The
appellate court reasons that while Kenneth did not own the property individually
at the time of the transfer, his signature on the 2009 Trust was sufficient to
convey title from the 1985 Trust to the 2009 Trust because the 1985 Trust was a
revocable inter vivos trust, he owned the property as sole trustee of the 1985
Trust, and he had the power to transfer real property owned by the 1985 Trust.
This case is interesting because the law has been moving towards confirming property listed on a Schedule A as trust property ever since the famous Heggstad case. It has now become settled that if title to a piece of real property was in the name of a person, a Schedule A to a trust or a general assignment to the trust was sufficient to transfer title to the trust, even if the person never got around to actually executing a deed. This is because the Trust, Schedule A, and/or general assignment is evidence of the intent of the person. This was not always the case, for years the Courts simply held: no actual transfer = no transfer. Heggstad was a watershed ruling because many people intend to have all of their property in their revocable trust but can either forget to transfer the property or forget to transfer it after a refinancing.
Worthington moves the law moves a bit farther towards effectuating the intent of a person, rather than following the technical rules of how the property is held.
Of course, the delay involved in probate litigation is the same as ever. This decision, issued over three and one-half years after Kenneth passed away, also shows us how long these type of matters can take to resolve.
Finally, remember to follow up on trust recording and use professionals so nothing falls through the cracks. Our office records the deeds so these type of oversights do not happen. A simple failure to record can have a significant impact on an estate.
This case is interesting because the law has been moving towards confirming property listed on a Schedule A as trust property ever since the famous Heggstad case. It has now become settled that if title to a piece of real property was in the name of a person, a Schedule A to a trust or a general assignment to the trust was sufficient to transfer title to the trust, even if the person never got around to actually executing a deed. This is because the Trust, Schedule A, and/or general assignment is evidence of the intent of the person. This was not always the case, for years the Courts simply held: no actual transfer = no transfer. Heggstad was a watershed ruling because many people intend to have all of their property in their revocable trust but can either forget to transfer the property or forget to transfer it after a refinancing.
Worthington moves the law moves a bit farther towards effectuating the intent of a person, rather than following the technical rules of how the property is held.
Of course, the delay involved in probate litigation is the same as ever. This decision, issued over three and one-half years after Kenneth passed away, also shows us how long these type of matters can take to resolve.
Finally, remember to follow up on trust recording and use professionals so nothing falls through the cracks. Our office records the deeds so these type of oversights do not happen. A simple failure to record can have a significant impact on an estate.
Posted by Henry ("Hank") Moravec III
Email: hm@moravecslaw.com
Office: 626-793-3210
Moravec Varga & Mooney
