Cure Defective Termination of Trust and Transfer of Real Estate

N/A

OUTCOME: Successful transfer of real estate to Grandma's 1997 Trust.

Grandma and Grandpa created a trust in 1993 specifically naming themselves, their children, their son-in-law and their only grandchild born as of that date as beneficiaries. It also stated that "any o ... ther descentant of the grantors who might be born at a later time shall be beneficiaries." There is also a paragraph in the Trust specifically prohibiting the transfer of the Rhode Island real estate without the consent of youngest daughter and son-in-law. Grandma and grandpa named themselves as Co-Trustees. They deed their real estate into this Trust. The deed from them individually to themselves as Co-Trustees of the 1993 Trust contained a defective legal description and notary clause. Grandpa had prepared the deed himself without the assistance of Rhode Island legal counsel. In 1997, Grandma and Grandpa seek the assistance of Massachusetts counsel and create two new Trusts, one for him and one for her. At the same time, they terminate the 1993 Trust but fail to transfer the real estate out of the terminated Trust. Grandpa dies in 1999 in Massachusetts and no probate is commenced. Under Rhode Island law, an automatic estate tax lien attaches. In 2010, Grandma is reviewing her estate plan to ensure that her youngest daughter receives the Rhode Island real estate, the title defect is discovered and the question arising as to ownership and title to the real estate. Probate is taken out for Grandpa. Grandma and eldest son both decline to act as Executors. The Will nominates the youngest daughter as second alternate Executrix. Estate tax returns are filed with both federal and state to release all liens. Youngest daughter and son-in-law have had a second child born in 1999 and presently a minor. Limited Guardianship is taken out on behalf of the minor child appointing his parents for the sole purpose of transferring any remainder interest he may have to his Grandma. A Miscellaneous Petition to Transfer Real Estate is filed in the Guardianship to authorize the parents to sign a Co-Guardian's Deed. Grandma executes a Memorandum of Trust and Deed to herself as Surviving Trustee of the 1993 Trust from her individually and in her capacity as Surviving Trustee of the 1993 Trust. Then as Surviving Trustee of the 1993 Trust, she executes a deed to herself. Youngest daughter in her capacity as Executrix of Grandpa's estate executes a deed to Grandma as Successor Trustee of Grandpa's 1997 Trust. Then Grandma executes a deed in her capacity as Successor Trustee of Grandpa's 1997 Trust. to herself individually. Then all named beneficiaries under the 1993 execute a confirmatory deed to Grandma individually. The Co-Guardian's Deed to Grandma individually and the Termination of the 1993 Trust are recorded next. Once all potential interests have been transferred to Grandma individually, Grandma executes a deed into her 1997 Trust.