Facts: A property owner holds title to a vacant lot in a revocable trust, naming their child as the successor trustee and beneficiary. Later, the owner and their caregiver orally agree to construct a home on the vacant lot for the caregiver. The property owner finances the construction and the caregiver contributes $100,000 in improvements, resulting in a total fair market value of $480,000. The caregiver later prepares a quitclaim deed for the newly-constructed property, stating the consideration for the property as $1, and the owner signs the document to transfer the property to the caregiver. The property owner later passes away.
Claim: The beneficiary of the trust seeks to void the quitclaim deed, claiming the transfer is donative since the caregiver did not provide adequate consideration for the property and, thus, it is invalid as the recipient of a donative transfer may not be the drafter of the quitclaim deed or the property owner’s caregiver.
Counter claim: The caregiver claims the quitclaim deed is not a donative transfer and, thus, valid since the caregiver provided adequate consideration for the property by contributing the cost of improvements.
Holding: A California court of appeals held the quitclaim deed was donative and invalid since the $100,000 in improvements was inadequate consideration for the $480,000 home and, as merely added value to the property being transferred to the caregiver, did not benefit the property owner in any way, thus barring the caregiver from being the recipient of the donative transfer as the drafter of the quitclaim deed and the property owner’s caregiver. [Jenkins v. Teegarden (October 23, 2014)_CA4th_]
