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What if...

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Upon decedent’s death, the family discovers in his papers an original signed, attested, but unrecorded, deed to himself as trustee of his inter vivos trust (i.e., trust that he established during his life).  The terms of his will would also place the property in the trust, but recording the deed would avoid probate under the will.  May the executor of the will now record it?

While the executor may record the deed, a title examiner on a subsequent transaction may inquire whether the decedent “delivered” the deed.  How can delivery be shown now?

For a deed to be effective, say, in the sale of a house, the seller must sign and deliver it to the buyer or someone on the buyer’s behalf.  Signature and delivery renders the deed effective between those two parties.  To make it effective as to third parties (or, more accurately, to put third parties on notice of it), the buyer must record it.  Recording a deed also generally conclusively establishes a presumption of delivery; but what if a careful title examiner later notices that the recording date was after the date of death?

Section 4.2 of the Georgia title standards says this:

Delivery of instruments attested or acknowledged and recorded is presumed in all cases in which the instrument appears to be the result of an arm’s length transaction. Specifically, delay in recordation does not customarily dispel the presumption. However, a deed recorded after the death of the grantor which does not appear to reflect an arm’s length sale transaction is not entitled to the presumption and necessitates inquiry.

Is a transfer by the settlor (the person who established the trust) to himself as trustee of the trust an “arm’s length” transaction?  The deed’s naming as grantee the trust, which would also end up with the property under the will, may alleviate concerns, but a careful title examiner may require inquiry into the circumstances.

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