Here’s a situation we see often: Sally dutifully creates a California Trust, and at the same time signs a “general property assignment” to the Trust, which states in effect, “I, Sally, hereby assign, transfer and convey to myself as trustee of my trust, all my right, title and interest in all property owned by me, both real and personal and wherever located.” (Notice Sally did not particularly identify any of the assets she assigned to her trust).
Several years later Sally dies. Tom is the successor trustee of Sally’s trust. Tom finds out that Sally failed to formally transfer title to several stocks worth $200,000 to her trust before her death.
The question arises—is the “general property assignment” sufficient to confirm the stocks are owned by Sally’s Trust? Or do the stocks need to be probated? Until recently the answer was usually “no”, the general assignment is not enough to confirm the stocks are owned by Sally’s trust, requiring Tom to file an expensive and time-consuming “Petition for Probate” to have Sally’s stocks “poured over” into her Trust.
But now, as of January 26, 2011, it is likely that Sally’s “general property assignment” is sufficient to confirm the stocks are indeed owned by Sally’s Trust—alleviating the need of filing an expensive and time-consuming “Petition for Probate”.
Justice Kenneth R. Yegan, writing for the California Court of Appeal, confirmed—that in a case like Sallys—a “general property assignment” is effective to transfer ones stock to his or her trust, even though the “general property assignment” does not particularly identify the stock. (Presumably, the general assignment would work for all non-real property assets, i.e., bank accounts, brokerage accounts, retirement accounts, life insurance, etc.)
This is good news for the family members of those who forget, or by some other kind of oversight, fail to properly fund non-real property assets into their trust before they die. Now, under California law, all non-real property assets in excess of $100,000 in value may likely be confirmed to be trust assets by way of a general property assignment (e.g., “I …, hereby assign all of my property to my trust”).
Unfortunately, as Justice Yegan points out, real property (houses, etc.) cannot be confirmed as trust assets by way of a “general assignment”, because real property must be either formally transferred to a trust by way of a deed, or particularly identified in an attached schedule to a trust. In cases where real property is not sufficiently identified as a trust asset, a petition for probate will most likely be required.
Usually the best course of action is to have the “deed” to ones real property titled in the name of the trust. Or, at a minimum, have a schedule attached to the trust that particularly identifies the real property (i.e., “That certain real property commonly known as 3750 Santa Fe Ave., Riverside, CA 92507”).