California Real Estate Lawyers Blog
Al’s siblings were put on title to Al’s property so that it would pass to them if Al died. Al decided to create a trust, and have the trust be on title, so the siblings conveyed title back to Al, and Al conveyed the property to the trust. But, Al did not create the trust until 13 days later. The deed from Al to the trust was then recorded, and Al died shortly thereafter.
Al’s siblings claimed that the transfer to the trust was ineffective, because the deed was signed before the trust was created. The Court said it was effective, and the trust owned the property. The question has never appeared in a California published decision, so the court looked at the law in other states. It agreed with the general rule that a deed to a corporation made before its organization is valid between the parties, though void if asserted against third parties. It found that here, Al the individual granted the property to Al the trustee, anticipating the creation of the trust. Therefore, the deed was effective between them.
Luna v. Brownell (2010) 185 Cal.App. 4th 668.