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What is the process for transferring real property out of an irrevocable trust by the trustee
Los Angeles, CA
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Posted 2 months ago in Trusts
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What is the process for transferring real property out of an irrevocable trust by the trustee? My father and mother created an living trust. When my mother passed, two of their properties went into an irrevocable trust in my moms name, my father was the trustee. A few weeks before my father passed, he gifted one of the properties to me and signed a grant deed. Now my brother and sisters are claiming that he had no right to do that. He had two other properties in his side of the trust to cover the value of the house he gifted me. Did my dad have the right to give me the property that was listed in the irrevocable trust? Do I have to give back the property?
Answers (2)
Steven Alan Fink
This attorney is licensed in California.
Posted 2 months ago.
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It depends on the language of the trust, the powers given to the trustee by the trust, and the specifics as to the beneficiaries and their shares. If the trust agreement permitted the transfer you do not legally have to give back the property. However, if you don't your relationship with your siblings will probably deteriorate.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. 
Joseph Bernard Mchugh Jr
This attorney is licensed in California.
Posted about 1 month ago.
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As Mr. Fink stated, the answer to your question depends on the language of the Trust. In reading between the lines, I believe your parents had and A/B Trust in which, upon the death of the 1st Spouse, the language of the trust may have required an Irrevocable "Decedent's" Trust, or "B" Trust, be funded with your mother's separate or community property interest. Trusts are written differently, but typically the surviving spouse is the Trustee, and may be entitled to the income the assets of the B Trust produced, and perhaps the beneficial interest of enjoying the asset (such as if the asset were the residence or a vacation home), but may be prohibited from depleting the principal of the Trust.
So, your father acting as Trustee, may have had the power to transfer the asset to you, but perhaps did not have the right to do this. If so, an action could be brought in court to have the assets that were given without authority, returned to the trust estate (Probate Code Section 850). However, some Trusts have language that allow the surviving spouse to have what is called a 'Power of Appointment", allowing them to change the beneficiary distributions. Or, perhaps there is language that allows the Trustee to change out assets from the A Trust to the B Trust. Anyway, the point is that you should have a consultation with an attorney that specializes in Trust Estates and Administration. Hope this helps! |
