Carne v. Worthington

Facts: A trustor of a revocable living trust in which the trustor is the sole trustee transfers title to a property into the trust by way of a recorded deed. The trustor then creates a second trust agreement which states “I transfer to my trustee the property listed in Schedule A, attached to this agreement.” The agreement does not reference the trustor’s role as trustee of the first trust and no deed conveying the property from the first trust to the second trust is entered into. The trustor dies.

Claim: The successor trustee to the second trust seeks to confirm title to the property as vested in the second trust, claiming the property was conveyed from the first trust upon the creation of the second trust agreement since the “I transfer” statement by the trustor in the agreement conveys title to the property into the second trust.

Counterclaim: The successor trustee to the first trust claims the second trust does not hold title to the property since a recorded deed is needed to properly transfer the property into the second trust and without it the property remains vested in the first trust since the trustor had no authority as an individual to transfer trust property.

Holding: A California court of appeals holds the successor trustee to the second trust holds vested title to the property without the need for a recorded deed since the “I transfer” statement made in the second trust by the trustor constitutes a valid conveyance of property. [Carne v. Worthington (April 13, 2016) __CA4th__]

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