Carne v. Worthington
246 Cal. App. 4th 548
| Cal. Ct. App. | 2016Background
- Decedent Kenneth Liebler executed a revocable inter vivos trust in 1985 (the "1985 Trust") and acquired real property on Via Regla into that trust by recorded deed.
- In 2009 Liebler executed a separate trust (the "2009 Trust") that lists the Via Regla Property on Schedule A and states, "I transfer to my Trustee the property listed in Schedule A." The 2009 Trust is signed by Liebler as grantor and by third-party cotrustees.
- After Liebler died, Melanie Carne (his daughter) sought to be successor trustee of the 2009 Trust and filed a petition to confirm the trust and that the Via Regla Property was an asset of the 2009 Trust.
- Defendant/beneficiary Dillon Hasting opposed, arguing (1) no deed was executed conveying the Via Regla Property into the 2009 Trust so the transfer failed, and (2) Liebler did not own the property in his individual capacity at the time (it was held by the 1985 Trust), so he could not transfer it to the 2009 Trust.
- The trial court denied Carne’s petition on both grounds. On appeal the Court of Appeal reversed, holding the trust instrument itself effected the transfer and that Liebler (as sole trustee of the revocable 1985 Trust) could transfer the property by signing the 2009 Trust.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a settlor must execute a separate deed to transfer real property into a trust where the trust instrument expressly transfers listed property | Carne: The 2009 Trust’s language plus Schedule A is a signed written instrument sufficient to transfer the property into the trust without a separate deed | Hasting: No separate signed deed was executed, so the real property was never conveyed to the 2009 Trust and the trust fails for lack of a res | Held: The trust instrument itself (signed and listing the property) constituted a valid transfer under Probate Code §15200(b)/§15206 as between parties; no separate deed was required |
| Whether Liebler could transfer property that was held in the 1985 Trust (i.e., he did not own it personally) into the 2009 Trust | Carne: At the relevant time the 1985 Trust was revocable and Liebler, as sole trustee/beneficiary, had the power to deal with trust property; his signature on the 2009 Trust conveyed title to the 2009 Trust | Hasting: Liebler did not own the property personally and did not execute the 2009 Trust in his capacity as 1985 Trust trustee, so he could not transfer the trust property to a new trust | Held: Because the 1985 Trust was revocable and Liebler had the power to transfer trust property during his lifetime, his signature on the 2009 Trust sufficed to convey title from the 1985 Trust to the 2009 Trust (court relied on Galdjie principle) |
Key Cases Cited
- Galdjie v. Darwish, 113 Cal.App.4th 1331 (Cal. Ct. App. 2003) (signatures by beneficiaries/settlors of a revocable trust can be sufficient to convey trust property when they have power to deal with the trust assets)
- Estate of Heggstad, 16 Cal.App.4th 943 (Cal. Ct. App. 1993) (a written declaration of trust by the owner who names himself trustee can create a trust in real property without a separate deed; court discussed methods under Probate Code §15200)
- Estate of Powell, 83 Cal.App.4th 1434 (Cal. Ct. App. 2000) (no separate deed was required where trust declaration or instrument satisfied statute of frauds requirements for trust property transfer)