The Law Of Trusts And Trustees 141 (Rev. 2d ed.

) (TREATISE)

Bogert's Trusts And Trustees Updated By The 2004 Pocket Part George Gleason Bogert, George Taylor Bogert; Pocket Part By George Gleason Bogert, George Taylor Bogert, Amy Morris Hess Chapter 9. The Trustee-His Property Interest-Qualification 141. Transfer Of Property Interest To Trustee FN1 Declaration of Trust It is sometimes stated that the transfer by the settlor of a legal title to the trustee is an essential to the creation of an express trust. The statement is inaccurate in one respect. Obviously, if the trust is to be created by declaration there is no real transfer of any property interest to a trustee. The settlor holds a property interest before the trust declaration, and after the declaration he holds a bare legal interest in the same property interest with the equitable or beneficial interest in the beneficiary. No new property interest has passed to the trustee. The settlor has merely remained the owner of part of what he formerly owned. FN2 However, if probate of the assets intended to be held under the declaration of trust is to be avoided, the assets should be reregistered in the name of the settlortrustee. FN3 Third Person as Trustee If the settlor intends to make one other than himself as the trustee, there must be a transfer to such person of the property interest to be held in trust before the trust administration can commence and before the person named as trustee can be trustee. If A, a fee-simple owner, desires to make B trustee of the land for C, it is obvious that B cannot commence his trusteeship until the fee simple is vested in him, nor can any one else begin the performance of the trust duties without acquiring such a property interest. If the settlor has manifested an intent that B and B alone is to be trustee, and that he does not desire the trust to exist unless B is trustee, then the transfer of the legal interest to B will be a sine qua non to the commencement of the trust. However insistence on a particular trustee is very unusual. Ordinarily the settlor has a primary and secondary intent in the case of the creation of a trust by the use of a third person as trustee. The settlor's primary desire is that the equitable property interest shall vest in the beneficiaries, and his secondary intent is that the legal interest shall vest in, and the duties of the trusteeship be carried on by, the person named by him as trustee. As previously shown in the sections dealing with the capacity of various persons to be trustee, FN4 equity does not regard the carrying out of this secondary intent as vital to the creation of the trust. Thus a trust may come into being without transfer of the

trustee's estate to any trustee, but the trusteeship of a particular trustee cannot begin until he has been given a property interest. Reasons for Failure of Property to Pass The reason that no property interest passes to the trustee may be any one of several. Occasionally the settlor names a trustee and indicates an intent to transfer a property interest to him at a future date, but never expresses a present intent to convey any interest to a trustee or beneficiary. FN5 Here the trust fails of creation because there was no expressed intent that it should arise, and not merely because of lack of transfer of property to the trustee. Again, where the settlor contemplates a transfer to a trustee by deed inter vivos but fails to deliver the deed in a technical sense, that is, fails to express a present intent that the deed shall have immediate operative effect, the trust fails to arise. FN6 This is not merely because the trustee did not receive title, but because the settlor's acts were of no legal consequence and so passed no equitable interest to the beneficiary. So also, if the settlor seeks to create a trust by will, but the will is void for defective execution, there will be a failure to vest title in the trustee and a defeat of the attempted trust creation; the vital reason for the frustration of the settlor's intent will not be that the trustee did not acquire title, but rather that no equitable interest vested in the beneficiaries. It has been shown FN7 that if a settlor intends to vest title in a trustee by deed or will, but his effort is fruitless in this regard because of failure to name any trustee or because of the naming of a trustee incompetent to take title, the trust will nevertheless arise if the other elements of the trust are adequately described, and therefore an equitable interest can pass to the beneficiaries. These cases are the clearest proof that the vesting of an estate in a trustee is not an essential to the commencement of a trust, although it is vital to the beginning of trusteeship by a particular trustee and to administration of the trust. The interest transferred to the trustee may be small or large. It may consist of mere possession and the right to continue in possession and manage for a limited period. FN8 Sometimes a court finds the creation of a trust where the trustee has been given such slight property interests. FN9 It would seem, however, that the transfer of such an interest is more characteristic of agency or bailment and that the transfer of mere possession and powers of management, instead of the larger interests usually called "legal title," ought to be nearly conclusive evidence that the transferor intended no trust but rather the relation of principal and agent or bailor and bailee. FN10 When and How Property Transferred FN11 Whether a settlor has in fact transferred an interest to a trustee and thus made him trustee is a question of fact as to the settlor's intent and a question of law as to means requisite to the manifesting of that intent. FN12 Often the transfer of the trustee's interest is by implication, as where there is first an apparently absolute gift, followed by the naming of a trustee, but without direct words of conveyance or transfer to the trustee. The naming of the trustee is deemed a gift of the trustee's interest to him by implication. FN13 Similarly, a transfer to a trustee of an equitable interest, with a power in him to acquire the legal interest, is enough to accomplish a trust in which the trustee is to hold the legal estate. FN14 Sometimes a settlor gives another a power of attorney to transfer the settlor's property to the donee of the power or to another as trustee for third persons or for

the settlor. FN15 This ordinarily does not effect a trust until the power has been executed. The settlor intends agency only until the power of attorney has been carried out, and then trust. The settlor may, however, manifest an intent that he (the settlor) shall be a trustee of the res until the power of attorney is carried out, FN16 and that thereafter the other trustee shall act. Such a case involves a careful analysis of the settlor's full intent. The methods of vesting property in the trustee are numerous. Aside from the more usual ways, deeds of realty or personalty, FN17 oral transfers of personalty accompanied by delivery, and by a will, the settlor may use the laws of intestacy. FN18 He may agree with his heir apparent for an express trust and then complete the trust by allowing his realty to pass to the heir by the operation of the statutes of descent. Or, instead of a direct transfer from settlor to trustee, the settlor may pay for property and have the deed run to himself as trustee for another. FN19 The trust agreement obviously may precede the transfer of title, FN20 as well as occur at the time of the transfer. Although normally the transfer of the property interest to the trustee will show that the trust is complete, a settlor may manifest an intent otherwise. He may indicate that until a formal trust instrument is executed, after the transfer of title, the trust is to be incomplete. FN21 Library References: FNa Late James Parker Hall Professor Of Law, University Of Chicago Law School, And Member Of The Bar In New York And Illinois. FNb Retired From The Chicago Bar. FNc UTK Distinguished Service Professor And Waller, Lansden, Dortch & Davis Distinguished Professor Of Law, University Of Tennessee College Of Law, And Member Of The Bar In Virginia And Tennessee. FN1 See Restatement, Second, Trusts 31 (Conveyance inter vivos to a person for his own benefit); 32 (Conveyance inter vivos in trust for a third person); 33 (Conveyance by will in trust); 34 (Conveyance to two trustees); 35 (Notice to and acceptance by trustee); 36 (Notice to and acceptance by beneficiary). Where after an oral gift of land the donee enters and makes valuable improvements he may obtain equitable title. Owens v. White, 1962, 126 S.E.2d 425, 218 Ga. 1. Necessity, in creation of trust, of transfer of legal title to trust res from settlor to trustee. 39 Ill.B.J. 354. See La.--LSA-R.S. 9:1821 (testamentary trust created at testator's death, without awaiting trustee's acceptance); 9:1822 (inter vivos trust created upon execution of trust instrument, without regard to the trustee's acceptance). Pocket Part Pocket Part FN: FN1 See Restatement, Second, Property, Chapters 31 (lifetime donative transfers without using a document), 32 (lifetime donative transfers using documents of transfer) and 33 (accomplishing a donative transfer by will). FN2 Where there are two settlors and they convey to one of them as trustee, the

transaction amounts to a declaration of trust by the trustee-settlor and to a transfer in trust by the other settlor. Lamb v. First Huntington Nat. Bank, 1940, 7 S.E.2d 441, 122 W.Va. 88, citing text, 129. If bank attempts to set up trust of part of its assets for investors to whom it sells certificates, and it sets apart notes and mortgages but does not transfer them to itself as trustee, no trust is established, even assuming such a trust would be valid. Ulmer v. Fulton, 1935, 195 N.E. 557, 129 Ohio St. 323, 97 A.L.R. 1170. A complaint which alleges that a trust existed, but also states that neither title nor possession of the trust property was transferred to the trustee, is demurrable. Windle v. Flinn, 1952, 251 P.2d 136, 196 Or. 654. As to the estate planning uses of a declaration of trust, see section 233, post. And see Restatement, Second, Trusts 56, Comment h (owner's intended declaration of trust "may fail either because the trust property is not designated prior to his death, or because the beneficiary is not designated prior to his death, or because he does not intend the trust to become effective until his death"). See also sections 147 and 148, post, as to the necessity for delivery of the trust instrument and trust assets. Pocket Part FN: FN2 A written declaration of trust by the owner of real property in which he names himself as trustee is sufficient to create a trust of that property. The law does not require a separate deed transferring the property to the trust. Estate of Heggstad, 1993, 20 Cal.Rptr.2d 433, 16 Cal.App.4th 943.
16 Cal.App.4th 943, 20 Cal.Rptr.2d 433 Court of Appeal, First District, Division 2, California. ESTATE OF Halvard L. HEGGSTAD, Deceased. Glen P. HEGGSTAD, as trustee, etc., Petitioner and Respondent, v. Nancy Rhodes HEGGSTAD, Objector and Appellant. No. A055005. June 21, 1993. Trustee petitioned probate court for instructions regarding disposition of property. The Superior Court, San Mateo County, Phrasel L. Shelton, J., concluded that there was a trust in the subject property. On appeal, the Court of Appeal, Phelan, J., held that: (1) settlor's written declaration stating that he held property as trustee was sufficient to create revocable living trust, and (2) trustee's petition for instructions invoked probate court's jurisdiction to determine whether property was part of estate or trust property. Affirmed. West Headnotes

[1] KeyCite Notes 390 Trusts 390I Creation, Existence, and Validity 390I(A) Express Trusts 390k24 Sufficiency of Language Used 390k25 In General 390k25(1) k. In General. Most Cited Cases

390 Trusts KeyCite Notes 390I Creation, Existence, and Validity 390I(A) Express Trusts 390k31 k. Transfer of Legal Title. Most Cited Cases Settlor's written declaration stating that he held property as trustee was sufficient to create revocable living trust; separate deed conveying property to settlor as trustee was not required.

[2] KeyCite Notes 390 Trusts 390I Creation, Existence, and Validity 390I(A) Express Trusts 390k24 Sufficiency of Language Used 390k25 In General 390k25(1) k. In General. Most Cited Cases

390 Trusts KeyCite Notes 390I Creation, Existence, and Validity 390I(A) Express Trusts 390k31 k. Transfer of Legal Title. Most Cited Cases

390 Trusts KeyCite Notes 390I Creation, Existence, and Validity 390I(A) Express Trusts 390k33 k. Delivery of Money or Other Personal Property. Most Cited Cases

409 Wills KeyCite Notes 409VI Construction 409VI(H) Estates in Trust and Powers 409VI(H)1 Creation of Testamentary Trusts 409k669 k. Creation of Testamentary Trusts in General. Most Cited Cases Settlor can manifest his intention to create trust in his property either by declaring himself trustee of property or by transferring property to another as trustee for some other person, by deed or other inter vivos transfer or by will.

[3] KeyCite Notes 390 Trusts 390IV Management and Disposal of Trust Property 390k178 k. Instructions of Court. Most Cited Cases Trustee's petition for instructions invoked probate court's jurisdiction to determine whether property was part of estate or was trust property. West's Ann.Cal.Prob.Code

17000, 17200. **434 *945 Edward D. Thirkell, Daniel Passamaneck, Thirkell and Cretan, San Mateo, for objector and appellant. *946 Donald A. Wilson, Wilson & Wilson, Redwood City, Michael Patiky Miller, Weinberg, Ziff & Miller, Palo Alto, for petitioner and respondent. PHELAN, Associate Justice. In response to respondent's petition for order instructing trustee, the probate court decreed that the decedent's undivided 34.78 percent interest in property identified as 100 Independence Drive, Menlo Park, San Mateo County, was vested in Glen P. Heggstad, as successor trustee of the Heggstad Family Trust, and was not part of the decedent's estate. We hold that the settlor's written declaration stating that he holds this property as trustee was sufficient to create a revocable living trust, and we affirm the probate court's order. FACTS On May 10, 1989, decedent Halvard L. Heggstad executed a will naming his son, respondent Glen P. Heggstad, as executor. Concurrently, the decedent executed a valid revocable living trust, naming himself as the trustee and his son Glen, the successor trustee (hereafter the Heggstad Family Trust). All the trust property was identified in a document titled schedule A, which was attached to the trust document. The property at issue was listed as item No. 5 on schedule A, and was mislabeled as "Partnership interest in 100 Independence Drive, Menlo Park, California." In truth, decedent had an undivided 34.78 percent interest in that property as a tenant in common. There is no dispute as to the nature of the decedent's interest in this property. This property remained in decedent's name, as an unmarried man, and there was no grant deed reconveying this property to himself as trustee of the revocable living trust. Both sides agree that decedent had formally transferred by separate deeds, all the other real property listed in Schedule A to himself as trustee of the Heggstad Family Trust. About one month after executing these documents, the decedent married appellant Nancy Rhodes Heggstad. She was not provided for in either the will or the trust documents, and all parties agree that she is entitled to one-third of the decedent's estate (her intestate share) [FN1] as an omitted spouse pursuant to Probate Code section 6560. [FN2] She takes nothing under the terms of the trust and makes no claim thereto. FN1. Decedent was survived by his son Glen and daughter Susan and a granddaughter.

FN2. Unless otherwise indicated, all further statutory references are to the Probate Code. Decedent died on October 20, 1990, and his son was duly appointed executor of his estate and became successor trustee under the terms of the *947 Heggstad Family Trust. The trust documents were recorded following decedent's death on January 10, 1991. During the probate of the will, Glen, the successor trustee, petitioned the court for instructions regarding the disposition of the 100 Independence Drive property. The trustee claimed that the trust language was sufficient to create a trust in the subject property and that the property was not part of his father's estate. In pertinent part, article 1 of the trust provided: "HALVARD L. HEGGSTAD, called the settlor or the trustee, depending on the context, declares that he has set aside and transfers to HALVARD L. HEGGSTAD in trust, as trustee, the property **435 described in schedule A attached to this instrument."

Appellant objected, arguing: the trustee is asking for a change of title, which is not available as a remedy in a petition for instructions; the property was not transferred to the trust by a properly executed document or by operation of law; and the trustee is also a beneficiary of the trust and should be removed because of this conflict of interest. The probate court concluded that the trust document, specifically article 1, was sufficient to create a trust in the subject property. DISCUSSION [1] Appellant contends that a written declaration of trust is insufficient, by itself, to create a revocable living trust in real property, and the decedent was required to have executed a grant deed transferring the property to himself as trustee of the Heggstad Family Trust. None of the authorities cited by appellant require a settlor, who also names himself as trustee of a revocable living trust, to convey his property to the trust by a separate deed. [FN3] Our independent research has uncovered no decisional law to support this position. To the contrary, all the authorities we have consulted support the conclusion that a declaration by the settlor that he holds the property in trust for another, alone, is sufficient. FN3. The case of Nichols v. Emery (1895) 109 Cal. 323, 41 P. 1089 cited by respondent is inapposite. That decision involves a revocable living trust, created by conveyance of the trust property, by deed, to a third party trustee. It has no application to the situation before us-- the creation of a revocable living trust by declaration of the settlor.

[2] To create an express trust there must be a competent trustor, trust intent, trust property, trust purpose, and a beneficiary. (Prob.Code, 15201-15205; *948 Walton v. City of Red Bluff (1991) 2 Cal.App.4th 117, 124, 3 Cal.Rptr.2d 275.) The settlor can manifest his intention to create a trust in his property either by: (a) declaring himself trustee of the property or (b) by transferring the property to another as trustee for some other person, by deed or other inter vivos transfer or by will. (11 Witkin, Summary Cal.Law (9th ed. 1990) Trusts, 26, p. 911; see also Getty v. Getty (1972) 28 Cal.App.3d 996, 1003, 105 Cal.Rptr. 259 ["An inter vivos trust can be created either by agreement or by a unilateral declaration of the person who assumes to act as trustee." (Emphasis in original.) ].) These two methods for creating a trust are codified in Probate Code section 15200: "(a) A declaration by the owner of property that the owner holds the property as trustee," and "(b) A transfer of property by the owner during the owner's lifetime to another person as trustee." ( 15200; see also Rest.2nd Trusts, 17.) Where the trust property is real estate, the statute of frauds requires that the declaration of trust must be in writing signed by the trustee. ( 15206; accord Rest.2d, Trusts, 40, com. b, at p. 105.) Here, the written document declaring a trust in the property described in Schedule A was signed by the decedent at the time he made the declaration and constitutes a proper manifestation of his intent to create a trust. Contrary to appellant's assertion, there is no requirement that the settlor/trustee execute a separate writing conveying the property to the trust. A review of pertinent sections of the Restatement Second of Trusts, illustrates our point. This consideration is particularly appropriate, since the Law Revision Commission Comment to section 15200 indicates: "This section is drawn from section 17 of the Restatement (Second) of Trusts (1957)." (Deering's 1991 Probate Code Special Pamphlet, p. 963.) Section 17 of the Restatement provides that a trust may be created by "(a) a declaration by the owner of property that he holds it as trustee for another person; or [] (b) a transfer inter vivos by the owner of property to another person as trustee for the transferor or for a third person...." The comment to clause (a) states: "If the owner of property declares himself trustee of the property, a trust **436 may be created without

a transfer of title to the property." (Ibid.) Illustration "1" of that same section is instructive. It reads: "A, the owner of a bond, declares himself trustee of the bond for designatedbeneficiaries. A is the trustee of the bond for the *949 beneficiaries. [] So also, the owner of property can create a trust by executing an instrument conveying the property to himself as trustee. In such a case there is not in fact a transfer of legal title to the property, since he already has legal title to it, but the instrument is as effective as if he had simply declared himself trustee." (Emphasis added.) Section 28 of the Restatement announces the rule that no consideration is necessary to create a trust by declaration. [FN4] This rule applies both to personal and real property, and it also supports our conclusion that a declaration of trust does not require a grant deed transfer of real property to the trust. Illustration "6" provides: "A, the owner of Blackacre, in an instrument signed by him, gratuitously and without a recital of consideration declares that he holds Blackacre in trust for B and his heirs. B is not related to A by blood or marriage. A is trustee of Blackacre for B." FN4. The section reads: "The owner of property can create a trust of the property by declaring himself trustee of it although he receives no consideration for the declaration of trust." More directly, comment m to section 32 (Conveyance Inter Vivos in Trust for a Third Person) provides in pertinent part: "Declaration of trust. If the owner of property declares himself trustee of the property a transfer of the property is neither necessary nor appropriate...." (Second emphasis added.) [FN5] FN5. Section 32 states: "(1) Except as stated in Subsection (2), if the owner of property makes a conveyance inter vivos of the property to another person to be held by him in trust for a third person and the conveyance is not effective to transfer the property, no trust of the property is created. [] (2) If the conveyance is ineffective only because no trustee is named in the instrument of conveyance or because the person named as trustee is dead or otherwise incapable of taking title to the property, a trust is created." Additionally, comment b to section 40 (statute of frauds) establishes that a written declaration of trust, by itself, is sufficient to create a trust in the property. Comment b states: "Methods of creation of trust. The Statute of Frauds is applicable whether a trust of an interest in land is created by the owner's declaring himself trustee, or by a transfer by him to another in trust." (Second emphasis added.) [FN6] FN6. Section 40 states: "(1) If by statute it is provided that all declarations or creations of trusts of land shall be manifested and proved by some writing signed by the party who is by law enabled to declare such a trust, or by his last will in writing, or else they shall be utterly void and of none effect, the rules stated in 41-52 are applicable. [] (2) A statute containing such a provision is in this Chapter referred to as the Statute of Frauds." Finally, Bogert, in his treatise on trusts and trustees observes: "Declaration of Trust [] It is sometimes stated that the transfer by the settlor of a legal title to the trustee is an essential to the creation of an express trust. The statement is inaccurate in one respect. Obviously, if the trust is to be created by declaration there is no real transfer of any property interest to a trustee. *950 The settlor holds a property interest before the trust declaration, and after the declaration he holds a bare legal interest in the same

property interest with the equitable or beneficial interest in the beneficiary. No new property interest has passed to the trustee. The settlor has merely remained the owner of part of what he formerly owned." (Bogert, Trusts and Trustees (2d ed. rev. 1977) 141, pp. 2- 3, fn. omitted.) These authorities provide abundant support for our conclusion that a written declaration of trust by the owner of real property, in which he names himself trustee, is sufficient to create a trust in that property, and that the law does not require a separate deed transferring the property to the trust. [FN7] FN7. We hasten to note, however, that to be effective as to strangers, the declaration of trust must be recorded. None of the practice guides relied upon by appellant state a contrary rule. In fact, **437 as appellant concedes, these works only recommend that a deed be prepared conveying title to the settlor as trustee. The purpose is to provide solid evidence of the settlor's manifestation of intent to create a trust, should a question arise. (See Drafting Cal.Revocable Living Trusts (2d ed. Cont.Ed.Bar 1984) 3.1, p. 52.) Moreover, the practice guide, Drafting California Revocable Living Trusts, supra, supports our conclusion that a transfer of title is not necessary when the settlor declares himself trustee in his own property. [FN8] Section 1.6 of that book states in part: "A trust always requires transfer of legal title to the trustee or, if a settlor is also trustee, a declaration by the settlor that he or she holds legal title in trust for another." (Emphasis added.) In fact, the very language recommended by that practice guide for declaring trusts is consistent with the decedent's trust document. Section 3.14-1 reads: "[Name of settlor] (called the settlor or the trustee, depending on the context) declares that [he/she] has set aside and holds in trust [e.g., the property described in Schedule A attached to this instrument]...." Article One of the trust substantially tracks this language and constitutes a valid declaration of trust in the property identified in Schedule A. Decedent took all the necessary steps to create a valid revocable living trust. FN8. While practice guides are not compelling authority, they are persuasive when there is an absence of precedent. As Witkin has observed, "Textbooks dealing with specialized areas of the law, and works on practice, are persuasive indications of what the prevailing law may be." (Witkin, Manual on Appellate Court Opinions (1977) 69, p. 114.) Respondent/trustee errs when he argues that in order to uphold the trust, we must view the trust document as a valid conveyance of the property to the trust. This argument misses the point that a declaration of trust is *951 sufficient to create a trust, without the need of a conveyance of title to the settlor as trustee. (See Bogert, Trusts & Trustees, supra, 141 at pp. 2-3.) II [3] Appellant next contends the probate court lacked jurisdiction to determine the testamentary nature of 100 Independence Drive, i.e., whether it was part of the estate or trust property. She claims that a petition for instruction to the trustee, under section 17200, cannot resolve the legal status of disputed trust property. This contention defies common sense and finds no support in the law. Section 17000 defines the subject matter jurisdiction of the probate court over trusts as follows: "(a) The superior court having jurisdiction over the trust pursuant to this part has exclusive jurisdiction of proceedings concerning the internal affairs of trusts. [] (b) The superior court having jurisdiction over the trust pursuant to this part has concurrent jurisdiction of the following: [] (1) Actions and proceedings to determine the existence

of trusts...." Section 17200 provides in part: "(a) Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust. [] (b) Proceedings concerning the internal affairs of a trust include, but are not limited to, proceedings for any of the following purposes: [] (1) Determining questions of construction of a trust instrument.... [] (3) Determining the validity of a trust provision." (Emphasis added.) These sections, by their express language, provide that a trustee's petition for instruction under subdivision (b)(1) of section 17200, invokes the probate court's general jurisdiction to decide the merits of a third-party challenge to the inclusion of property in a trust. This interpretation not only makes sense as a matter of judicial economy, but it also recognizes the probate court's inherent power to decide all incidental issues necessary to carry out its express powers to supervise the administration of the trust. As the Law Review Commission Report to section 17001 explains: "A corollary of the principle that the superior court considering internal trust affairs should have full **438 powers is the rule that this court has concurrent jurisdiction with other courts over questions involving the existence of trusts, disputes with creditors or debtors of trusts, and other matters involving disputes between trustees and third persons. Thus as a matter of judicial economy, the superior court, in proceedings brought before it concerning *952 internal trust affairs, has the power to determine issues other than those strictly relating to the internal affairs of the trust. If a question as to the rights of a third person arises in such proceedings, the court will have the opportunity to decide the issue and need not refer it to another department of the superior court." (18 Cal.Law Revision Com. Reports, p. 581, emphasis added.) [FN9] FN9. Section 17001 provides: "In proceedings commenced pursuant to this division, the court is a court of general jurisdiction and has all the powers of the superior court." Also, the Law Revision Commission Report on section 17200 states: "The proposed law continues existing law in this area, but adds additional grounds for petition. These include determining questions of construction of trust instruments...." (18 Cal.Law Revision Com. Reports, p. 583.) The plain language of the statutes and the Law Revision Commission's comments support our conclusion that the probate court may decide if an enforceable declaration of trust has been made upon review a trustee's petition for instruction. The same relief would have been available to this respondent/trustee, who also was executor of the estate, had he petitioned the probate court for an order to convey or transfer property held by the decedent under section 9860. That statute provides in part: "(a) The personal representative or any interested person may file a petition requesting that the court make an order under this chapter in any of the following cases: ... [] (3) Where the decedent died in possession of, or holding title to, real or personal property and the property or some interest therein is claimed to belong to another...." (See also 12 Witkin, Wills and Probate, op. cit. supra, 341, pp. 377-378.) The probate court has general subject matter jurisdiction over the decedent's property and as such, it is empowered to resolve competing claims over the title to and distribution of the decedent's property. ( 7050, subd. (b); see, e.g., Estate of Baglione (1966) 65 Cal.2d 192, 196-197, 53 Cal.Rptr. 139, 417 P.2d 683 ["[A] superior court sitting in probate that has jurisdiction over one aspect of a claim to certain property can determine all aspects of the claim."].) It is of no legal significance that respondent/trustee chose to seek relief through a petition for instruction ( 17200), rather than the equivalent petition for conveyance or transfer ( 9860). The issue of whether the property belonged to a living trust or whether it should be probated in decedent's estate are opposite sides of the same coin, and it is a fruitless exercise in semantics for appellant to argue that the probate court may only decide this issue as part

of its administration of the decedent's estate. Appellant's contention fails. *953 The probate court's order declaring that the property identified as "100 Independence Way, Menlo Park, San Mateo County," is included in the living trust is affirmed. KLINE, P.J., and BENSON, J., concur. Cal.App. 1 Dist.,1993. Estate of Heggstad 16 Cal.App.4th 943, 20 Cal.Rptr.2d 433 END OF DOCUMENT
(C) 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.

See, e.g., Taliaferro v. Taliaferro, 921 P.2d 803, 260 Kan. 573 (1996) (upholding inter vivos declaration of trust in which no reference to transfer of legal title was made because "[w]here, as here, the settlor and the trustee are the same person, no transfer of legal title is required, since the trustee already holds legal title"). But see Estate of Rothwell, 730 N.Y.S.2d 664, 189 Misc.2d 191 (Sur. Ct. 2001). The Court cited N.Y. Est. Powers & Trusts Law 7-1.18 to the effect that "a lifetime trust shall be valid as to any assets therein to the extent the assets have been transferred to the trust." The New York Surrogate's Court then held that, where settlor of inter vivos trust simply attached to the trust document a schedule reciting that specific items belonged to the trust, of which settlor was also trustee, the schedule was ineffective as a transfer of the assets into the trust, given that as to "assets which may be registered such as stocks, bonds, bank accounts, real estate, etc., transfer means completion of the recording of the deed, change of title of the bank account, actual re-registration of the stock certificate or change of the security account, etc." Cf. Grant v. Grant, 810 So.2d 1226 (La. Ct. App. 2002), writ denied, 817 So.2d 1158 (La. 2002). One of deceased settlors' sons challenged validity of transfer of property into trust, alleging that settlors' succession owned the property due to the invalid transfer and thus that settlors' sons had forced heirship rights as to the property. The Louisiana Court of Appeals upheld trial court's grant of summary judgment against settlors' son, emphasizing that, under La. Rev. Stat. Ann. 9:1731, valid trust creation conclusively transfers title to property to the trustee regardless of lack of specific conveyance language. The court held a valid trust existed because the trust document adequately identified the property to be held in trust and expressed settlors' intent to create a trust, even though settlors continued to receive and control trust funds and reside in trust property as present beneficiaries of the trust. FN3 Registration of assets in the name of the trustee may also become important in the event of the settlor's incapacity or disability. Otherwise the assets may become subject to both conservatorship and probate proceedings in the settlor's estate. See, A discussion of the self-declaration of trust. Nicholson. 1973 Univ. of Miami Instit. on Est. Planning, ch. 73-6. FN4 See sections 123-128, ante. Pocket Part FN: FN4 But see Fielding v. BT Alex Brown, 116 F.Supp.2d 59 (D.D.C.2000) (holding that, where settlor attempted to establish a Rollover Individual Retirement Account Trust, naming the trustee and beneficiaries and

evidencing "the requisite intent to create the Trust," but where title to the trust assets (some $470,000 settlor placed in account at non-trustee bank) was never transferred to the named trustee, the trust was not properly created and so never came into existence, with the U.S. District Court for the District of Columbia stating that "the law of the District of Columbia does require that the trustee take title to the trust assets ... in order to create a trust"). Cate-Schweyen v. Cate, 15 P.3d 467, 303 Mont. 232 (2000) (reversing trial court determination that decedent created a valid and enforceable testamentary trust (with mineral interests as the res) in favor of his children by prior marriage, the Montana Supreme Court holding the trust inter vivos due to present conveyance language and a present income interest to settlor as beneficiary, and due to the trust being irrevocable rather than revocable, and with Montana's highest court thus holding the trust legally unenforceable as a "dry" or "phantom" trust because settlor did not convey the intended res to the trustee during settlor's lifetime, as required by Mont. Code Ann. 72-33- 201(2) in the case of an inter vivos trust). FN5 Where state law required irrevocable delivery of a deed to vest legal title in a trustee, taxpayer's mere agreement to hold as trustee a portion of his real estate holdings was insufficient for income tax purposes. No deed was delivered or registered, no gift tax was paid and the instrument in question contained no words of operative conveyance. Hayutin v. C. I. R., C.A.10, 1974, 508 F.2d 462. Becker v. Stroeher, 1902, 66 S.W. 1083, 167 Mo. 306. Pocket Part FN: FN5 " ' ... [I]t is essential to the creation of an express trust that the settlor presently and unequivocally make disposition of property by which he divests himself of the full and legal ownership thereof.... [I]t does not suffice to create a present trust that the settlor merely intend or manifests an intent to create a trust in the future.' " (citations omitted) Estate of Hatten v. Mercantile Bank of Springfield, Mo.App.1994, 884 S.W.2d 326, 330. In Hatten, the court held that an attorney-in-fact, acting under a valid durable general power of attorney for the grantor of a revocable inter vivos trust, failed to transfer certain tangible assets to the trust when he handed them to a trust officer of the trustee bank during an inventory of the grantor's safe deposit box but failed to execute a bill of sale of the tangibles in accordance with the bank's usual procedure. FN6 Executive Committee of Christian Education and Ministerial Relief of the Presbyterian Church in the United States v. Shaver, 1927, 135 S.E. 714, 146 Va. 73; Van Studdiford v. Randolph, Mo.App., 1899, 49 S.W.2d 250. Pocket Part FN: FN6 The trust provided that upon settlor's death her condominium and cash were to be distributed to a named person. A later instrument dated and signed by the settlor stated to the trustee that along with the condominium the settlor wished the named person to have certain chattel property. Where the condominium was never deeded to the trustee it did not become a part of the trust. Settlor's instrument delivered to the trustee expressed only her wish and did not constitute a will disposing of the condominium and the chattel property which were to be distributed under the intestate laws. Dahlgren v. First Nat. Bank of Nevada, 1978, 580 P.2d 478, 94 Nev. 387. Ballard v. McCoy, 1994, 443 S.E.2d 146, 247 Va. 513 (trust agreement evidenced settlor's intent that the agreement would become effective only when he had "delivered property" to his trustees, which he did not do).

Decedent had created a living trust whose terms referred to a list of personal assets to be attached to the trust instrument. No such list was attached at the time of decedent's death, but a list was found in decedent's safe deposit box with both her trust and will. The court held the trial court had properly determined that the personal property passed under decedent's will rather than the trust. Flagship National Bank of Boynton Beach v. Kelley, Fla.App.1987, 516 So.2d 1067. Appellant established a trust with appellee-bank as trustee and delivered contracts for the sale of land he had sold to the trustee with instructions to the trustee to collect the payments on the contracts as part of the trust income. Though requested by the trustee appellant never assigned the land contracts to the trustee. When appellant borrowed from the same bank, securing his loan with a mortgage on real estate, he informed the bank that payments on the note were to be made out of trust income. This instruction was canceled and the trust terminated by appellant. In the bank's suit to foreclose on appellant's note and mortgage, appellant contended that the bank had breached its fiduciary duty by failing to collect arrearages on the land contracts. The court held that where appellee-bank as trustee had never received either assignments of the land contracts or deeds to the lands, appellee had been incapable of enforcing the land contracts and therefore could not have breached any fiduciary duty to collect. Assignments of interests in land contracts were required to be in writing. The contracts never became part of the trust res. First Nat'l Bank of Middletown v. Gregory, 1983, 468 N.E.2d 739, 13 Ohio App.3d 161. FN7 See sections 123-125, ante. FN8 See section 111, ante. FN9 Hall v. Hall, 1908, 93 P. 177, 76 Kan. 806; Bump v. Pratt, 1895, 32 N.Y.S. 538, 84 Hun. 201; J. J. Little & Ives Co. v. Acceptance Corporation, 1926, 213 N.Y.S. 606, 607, 608, 215 App.Div. 427 (wherein the court states that "It is familiar doctrine that a person coming into the possession and control of the property of another becomes a trustee thereof"); In re Carlin's Estate, 1925, 202 N.W. 201, 185 Wis. 438. FN10 Hall v. Crane Bros. Mfg. Co., 1877, 87 Ill. 283; West v. White's Estate, 1885, 22 N.W. 217, 56 Mich. 126, 128. Although persons are called "depository trustees", they are not trustees but merely agents when they are merely to receive endorsed shares of stock from stockholders of one corporation and deliver them to shareholders of a second corporation in return for stock certificates which are to be passed back to stockholders of first corporation; hence so-called trustees cannot sue to enforce the agreement. Bennett v. National Lycoming Corp., 1935, 178 A. 577, 20 Del.Ch. 393. Where a lender has the borrower make a note to the lender's daughter, but the lender keeps possession of the note in order to collect interest, and the lender intends to make a gift of the note to his daughter, he is trustee of it for her and his administrators succeed him as trustees. Cooey v. Cooey, 1938, 182 So. 202, 132 Fla. 716. This case seems to be wrongly decided, since it makes the father trustee even though he had no property in the note except possession. It should have been held that a gift of the legal interest in the note had been perfected. FN11 As to transfers made in the creation of insurance trusts, see sections 142 and

236, post. As to the transfer of property in trust made by the exercise of a power of appointment, see section 43, ante. In order to create an express trust it is not necessary that the instrument contain words of gift to the trustee, if the intent to have a named person act as trustee is stated and directions as to administration are given. Moore v. Neely, 1963, 370 S.W.2d 537, 212 Tenn. 496, citing text, 141. The executors sought to cancel a demand note executed by decedent's son and made payable to decedent, alleging that decedent had made a gift of the note to his son during his lifetime. The court held that decedent made his employees trustees for his son to cancel son's unsecured note. The validity of the trust did not depend upon the trustees coming into physical possession of the note as the trust res. Decedent had made an effective delivery of the trust res by renouncing all control over the note. In re Estate of Field, 1968, 240 N.E.2d 765, 99 Ill.App.2d 235. FN12 Although a testamentary trustee may be nominated by the testator, he is not really appointed and does not get title until the court appoints him. In re Barter's Estate, 1947, 184 P.2d 305, 30 Cal.2d 549. A testamentary trustee gets his title through the probate of the will, and has no title until the will is probated. First Nat. Bank of Boston v. Harvey, 1940, 16 A.2d 184, 111 Vt. 281. Pocket Part FN: FN12 For example: When evidence showed that a grantor executed a real estate trust for the benefit of his grandchildren, naming his children as trustees, gave the deed to his son-in-law to record, and, when it was returned to him unrecorded, kept the deed for 8 years, informed his grandchildren that the property was being transferred to them, forgave promissory notes due on the purchase price, and finally recorded the deed in order to assure that the trust property would not be part of his estate when he died, a trial court could properly conclude that he intended to create a trust for his grandchildren and that this intent was accomplished by delivery of the deed. Poling v. Northup, 652 A.2d 1114 (Me.1995). When a marriage dissolution agreement sets aside certain property in trust for the sole benefit of the debtor's children, this property cannot be included in the bankruptcy estate, even if the debtor had not formally transferred ownership of the property to any trust or to the minor children. In re James, 186 B.R. 262 (Bankr.D.Mont.1995). Keitel v. Heubel, 126 Cal.Rptr.2d 763, 103 Cal.App.4th 324 (2002). Sister (Heubel) filed claim against brother (Keitel) after he transferred bulk of mother's assets to his and his spouse's names through a power of attorney during mother's life and after mother's death through mother's estate. After the trial court judgment against brother directing that he compensate sister, brother transferred assets to inter vivos revocable trust and when advised that the trust was available for judgment creditors, brother filed for bankruptcy in another court. The bankruptcy petition was dismissed with prejudice. The Court of Appeals affirmed the judgment entered by the trial court against the brother and sanctioned him for fraud for attempting to shelter the assets with the bankruptcy petition. FN13 In re Reith's Estate, 1904, 77 P. 942, 144 Cal. 314; Youmans v. Buckner, 1837, 3 Hill (S.C.) 218. And see Mersereau v. Bennet, 1908, 108 N.Y.S. 868, 124 App.Div. 413.

Where a settlor imposes trust duties on trustees by a will, they take as trustees even though the realty is not specifically devised to them. Booth v. Krug, 1938, 14 N.E.2d 645, 368 Ill. 487, 117 A.L.R. 1193. A trust of stock may be created by delivery of the stock certificates to the trustee, endorsed in blank, even though the trust instrument contains no words of conveyance. Robbins v. Continental Nat. Bank & Trust Co. of Chicago, 1944, 58 N.E.2d 254, 324 Ill.App. 422. Where a trust agreement specifically covers realty and is signed by the title holder, it will be effective as to the realty although there is no conveyance of it to the trustee. Mock v. P. F. Goodrich Corp., 1942, 38 N.E.2d 900, 110 Ind.App. 685. Where a deed runs to "Jacob Rimbach, Trustees", and it is proved that by the will of Rimbach his four daughters were trustees, they will be treated as grantees in the deed, in their trust capacity. Lassiter v. Goldblatt Bros., 1942, 41 N.E.2d 803, 220 Ind. 215. Where testator gives parties the duties of trustees regarding named property, a trust is created although there is no specific bequest or devise to them. Johnson v. Muller, 1939, 86 P.2d 569, 149 Kan. 128. Where deed runs to A, as trustee, but habendum is to heirs and assigns of A, with no mention of trust, A does not take as trustee, but court will order him to convey to himself as trustee, if he subjects himself to the jurisdiction of the court. Pungs v. Hilgendorf, 1939, 286 N.W. 152, 289 Mich. 46. It is unimportant that a will creating a trust does not expressly devise the realty to the trustee, if it confers powers on the trustee which require a title. There is an implied devise of the needed estate. Morse v. Paulson, 1948, 186 P.2d 394, 182 Or. 111. Where specific property is given by will to named trustees, the legal title vests in them as of the date of the testator's death, even though they do not qualify and take possession until later. In re Greene's Will, 1942, 3 N.W.2d 704, 240 Wis. 452, 142 A.L.R. 129. FN14 Talbot v. Talbot, 1911, 78 A. 535, 32 R.I. 72. FN15 Milroy v. Lord, 4 De G. F. & J. 264; Farmers' Loan & Trust Co. v. Winthrop, 1924, 144 N.E. 686, 238 N.Y. 477. Property holder delivered property to a trust company and directed it to sell the property and apply the proceeds to buying an annuity for the plaintiff, but he died before the trust company carried out the agreement. The agency was revoked and there was no trust. McIntyre v. Royal Trust Co., (1946) 1 Dom.L.R. 655. Power to appoint among issue--appointment on protective trusts--delegation-excessive execution. In re Hunter's Will Trusts, (1962) 3 W.L.R.1442, Camb.L.J.1963, 46. See Loring v. Karri-Davies, 1976, 357 N.E.2d 11, ___ Mass. ___ (donee's exercise of special powers by appointments in further trusts not valid exercises of the powers; property subject to powers passed to default takers). Pocket Part FN: FN15 Cf. In re Trust of Jameison, 8 P.3d 83, 300 Mont. 418 (2000) (upholding trial court's invalidation of trust created by attorney-in-fact which made her the trustee and lifetime income beneficiary, and which was funded with the property of grantor of the power of attorney, with the Montana Supreme Court noting that it was undisputed that attorney-in-fact had only a "general power of attorney," which did not "specifically grant the authority to create a trust, reflect

Jameison's [grantor's] intent to create a trust, or even mention a trust," and said appellate court thus holding that grantor did not transfer property during her lifetime to attorney-in-fact as trustee, meaning that the trust was not created by one of the means prescribed by Mont. Code Ann. 72-33-201). FN16 Ex parte Pye, 18 Ves. 140. FN17 The grantor and his four sons executed deeds to another as trustee to enable the trustee to reconvey to them as partners undivided interests in the property. The grantor and his wife executed their deed and left it in the possession of a notary public. The trustee had agreed to accept the trusteeship and signed the deed. Upon grantor's death prior to physical delivery of the deed the court held that there was sufficient delivery to enable the trustee to reconvey. Watson v. Watson, 1968, 215 So.2d 290, 283 Ala. 214. The trust agreement provided that the trustee was to keep securities and property delivered to it "registered" in the settlor's name. This provision did not constitute a fatal defect in the creation of the trust corpus. Possession had been transferred and was accompanied by endorsement assignment forms later used by the trustee to reregister the stocks in its name. Delivery of the stocks and forms, with a recitation in the trust agreement sufficient to establish a present and unequivocal intent to vest the trustee with title, constituted an adequate transfer of title to the trustee. Exchange Nat. Bank of Colo. Springs v. Sparkman, 1976, 554 P.2d 1090, 191 Colo. 534. A gift of a limited interest in realty may be accomplished by the execution and delivery of a writing showing the intent of the donor and the transfer and acceptance of possession of the realty involved. Stratton v. Corder, 1963, 366 S.W.2d 894, 236 Ark. 472. The use of the word "heirs" in a deed or will is not necessary in order to convey a fee. Dennen v. Searle, 1961, 176 A.2d 561, 149 Conn. 126. Sister alleged that brother had obtained title to property as a result of an agreement among the three children that they would enter into a family settlement agreement after their father's death. Sister sought to impose a constructive trust on her alleged interest in the property. The court held that no fiduciary relationship existed between sister and brother. Sister had no right, title or interest in the property. Even though brother never picked up his deed and later the deed was returned to father, who placed it in the family safety deposit box, the deed had been effectively delivered and recorded prior to father's death. Yunghans v. O'Toole, 1978, 581 P.2d 393, 224 Kan. 553. Deed to a business trust by its name, without mention of trustees, is valid, and names of trustees who get title may be shown by extrinsic evidence, since the trust name was merely a symbol for the names of the trustees. Hodgkiss v. Northland Petroleum Consol., 1937, 67 P.2d 811, 104 Mont. 328. In order that a written statement of intent to give may have the effect of a deed of gift, the instrument must be delivered to the donee. Gray v. Gray, 1956, 304 P.2d 650, 78 Idaho 439. Where a sister who was sole heir of intestate signed an instrument authorizing the administratrix to collect all the assets of the estate and distribute them onethird to her, and two-thirds to six others who were half-brothers and sisters of the intestate, it was held that the gift was incomplete until the estate had been distributed, and could be revoked prior to that time. The court puts this case: "If B. is in possession of property belonging to A., A. may direct him to give it to C., and, when delivered to C. by B., C.'s title thereto becomes perfect; but until so delivered,

C. has no title at all; the ownership remains in A., and he may revoke B.'s authority to deliver it to C." Raley v. Shirley, 1956, 89 So.2d 636, 228 Miss. 631. A gift of domestic animals may be made by a delivered deed of gift, without transferring possession of the chattels. Beck v. Givens, 1957, 309 P.2d 715, 77 Wyo. 176, rehearing denied 313 P.2d 977, 77 Wyo. 176. Instrument of transfer vests title in trust estate. Mich.--M.C.L.A. 707.20. Pocket Part FN: FN17 By Fla.L.1980, Ch. 80-219, a trust estate may be conveyed by deed with a witnessed signature delivered without the requirement of a seal. See West's F.S.A. 689.06. The trial court properly determined that realty owned by the settlor had not been validly transferred to her living trust and therefore passed under the residuary clause of her will. The settlor had not executed a deed conveying the realty to the trustees and neither the trust instrument nor the attached Schedule A could constitute a conveyance. Flinn v. Van Devere, Fla.App.1986, 502 So.2d 454, citing text, 142, review denied 1987, 511 So.2d 998. The divorce judgment contained a separation agreement under which husband and wife agreed that certain real property would be placed in an irrevocable trust for the benefit of their children. The trust agreement empowered the trustee to sell, lease or otherwise dispose of the trust property. However, no deeds to the real property were delivered to the trustee. In a suit for specific performance by the contract purchaser of the property the court held that failure to carry out the necessary acts to transfer the property into the trust did not defeat the purchaser's rights. There was no ambiguity regarding the trust res and the effect of the court's order. Where the purchaser could reasonably have relied on the separation agreement and the trustee's authority to sell the property, wife was estopped in this proceeding from claiming an interest in the property. Shaheen v. Vassilakis, 1992, 612 N.E.2d 435, 82 Ohio App.3d 311. Under a settlement in lieu of foreclosure plaintiff bank and defendant executed an agreement whereby defendant conveyed real estate to plaintiff as trustee, retaining the right to sell the property. Where defendant was unable to sell the property plaintiff recorded the deed and arranged for a public auction sale of the property pursuant to the terms of the agreement. Three days before plaintiff purchased the property at the public auction appellants filed judgments of confession against defendant and claimed the judgments constituted valid liens against the property held by plaintiff. The court held that defendant's conveyance by warranty deed vested title in plaintiff as trustee of an express trust and that the judgments against defendant therefore did not attach and constitute liens against the real estate. Bank of Cody v. Fanning, S.D.1984, 353 N.W.2d 352. Keitel v. Heubel, 126 Cal.Rptr.2d 763, 103 Cal.App.4th 324 (2002). Sister (Heubel) filed claim against brother (Keitel) after he transferred bulk of mother's assets to his and his spouse's names through a power of attorney during mother's life and after mother's death through mother's estate. After the trial court entered judgment against brother directing that he compensate sister, brother transferred assets to inter vivos revocable trust and when advised that the trust was available for judgment creditors, brother filed for bankruptcy in another court. The bankruptcy petition was dismissed with prejudice. The Court of Appeals affirmed the judgment entered by the trial court against the brother and sanctioned him for fraud for attempting to shelter the assets with the bankruptcy petition. Michigan repealed the previous Revised Probate Code in April, 2000, and enacted the Estates and Protected Individuals Code. Mich. Comp. Laws Ann.

700.3711 (personal representative) and Mich. Comp. Laws Ann. 700.7401 (trustees) now address issues of title of property. FN18 Ransdel v. Moore, 1899, 53 N.E. 767, 153 Ind. 393, 53 L.R.A. 753. FN19 Reilly v. Whipple, 1871, 2 S.C. 277. FN20 Faulds v. Dillon, 1925, 204 N.W. 733, 231 Mich. 509. FN21 Lloyd v. Brooks, 1871, 34 Md. 27. But a trust declaration, followed by a statement of intent to make a transfer later, shows a complete trust. Rayhol Co. v. Holland, 1930, 148 A. 358, 110 Conn. 516.

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