Quitclaim Deed/Trust

[juliaq]

What is the name of your state (only U.S. law)? Ca

I am one of 7 beneficiaries of a trust my uncle set up. He left his fully paid off home in the trust equally to all 7 of us. One of the beneficiaries lives in the home and pays the taxes and maintenance in exchange. If he ever wants to sell the home, we would each receive our equal share. However, I just received notice that the trustee (who is also a beneficiary) signed a quitclaim deed relinquishing full ownership to the person who currently lives in the home. I checked the property deed and it is listed only in the current occupants name. Is this legal? From what I understand a quitclaim deed cannot sign away other people's share of property, but since he did it as the trustee and not just his own portion, did I just lose my percentage of the ownership of the home?

 

[LdiJ]

What is the name of your state (only U.S. law)? Ca

I am one of 7 beneficiaries of a trust my uncle set up. He left his fully paid off home in the trust equally to all 7 of us. One of the beneficiaries lives in the home and pays the taxes and maintenance in exchange. If he ever wants to sell the home, we would each receive our equal share. However, I just received notice that the trustee (who is also a beneficiary) signed a quitclaim deed relinquishing full ownership to the person who currently lives in the home. I checked the property deed and it is listed only in the current occupants name. Is this legal? From what I understand a quitclaim deed cannot sign away other people's share of property, but since he did it as the trustee and not just his own portion, did I just lose my percentage of the ownership of the home?

If you did, you need to sue his backside, big time. He had no right to just give the property to only one out of 7 beneficiaries. Now, he had right to sell it to one beneficiary at fair market value, in order to divide the proceeds of the sale to all of the beneficiaries.

If the home is worth enough, its probably time to get an attorney involved.

 

[juliaq]

It definitely was not sold to the person living in the home. I have a copy of the quitclaim deed, and it says "so-and-so, trustee of XX family trust hereby remise, release and forever quitclaim to YYY" and then it has the address and property information listed. I was able to pull the deed to the house and sure enough, the current occupant is listed as sole owner. All the beneficiaries are members of the same family. I'm just wondering if the quitclaim is valid since he did it as the trustee, and not just himself relinquishing his portion.

 

[HRZ]

ABsent resolution of some life estate to one person it sure reads like a faulty exercise of trustee duties ...favoring but one person but if trustee disposed of an asset worth say 1.4 million.....you best round up some legal talent to get your $200,000

Sounds like a wacky deal for 6 to merely wait ...is there more to story?

 

[Zigner]

The trust owns the house, so yes, that way seems appropriate insofar as the mechanics of it.

Are you SURE that the trust doesn't allow for this sort of transfer? Have you asked the administrator of the trust about this?

 

[NIV]

If the trustee was not acting in accordance with the trust's terms and his actions unfairly benefited a beneficiary, he is in violation of his fiduciary duties.

See an attorney immediately. There is a possibility of a multiplier on any damages.

 

[Zigner]

To be clear for everyone - I'm not saying that any actions made by the administrator was in line with the terms of the trust. I'm merely pointing out that the way the property was transferred out of the trust was correct in its wording, even though it might not comply with the terms of the trust.

 

[LdiJ]

The trust owns the house, so yes, that way seems appropriate insofar as the mechanics of it.

Are you SURE that the trust doesn't allow for this sort of transfer? Have you asked the administrator of the trust about this?

It would be a highly unusual trust if it permitted the assets of the trust to be given to just one of 7 beneficiaries at the whim of the trustee.

 

[juliaq]

I just found out about all of this, the quitclaim was done within the last year. The way the trust is set up is the 7 beneficiaries are myself, my 3 siblings, and then 3 of our cousins who are siblings. The person living in the home lived with and took care of my uncle while he was alive, and in exchange for doing that, he lives in the house free of rent (but does take care of taxes and maintenance). This was my uncle's desire and we all respect that, on his own this cousin would have a hard time making rent. If he ever moves out or decides to sell the home, per the will and trust, we should all benefit equally from the sale, but now I am very worried that my interest in the home has been signed away. The house is worth about 675K. The person who lives in the home is my cousin, and his brother is the trustee. My siblings and I never would have agreed to have our rights to the home signed away.

 

[juliaq]

I was just told about this by my brother, so yes, we are looking into contacting an attorney. We have asked for clarification from the trustee (my cousin) because I can't understand how or why he would do this. He has always been a very honest person and dealt with other trust matters very fairly. By doing a quitclaim he signed away his claim and his sister's claim to the house as well??

 

[HRZ]

THe written terms of the trust count ....NOT your view of makers good intentions

Hard to imagine this was proper execution of trustees duties to other 6 out of 7

YEs it might make sense to sell the property at FMV and distribute proceeds

 

[juliaq]

That's what I can't figure out, in signing a quitclaim he even signed away his own claim to the house. I don't want this to get ugly as we are family. I don't even want to force a sale of the house, but I'm not willing to forfeit my stake in it either, it's a substantial amount of money.

 

[LdiJ]

That's what I can't figure out, in signing a quitclaim he even signed away his own claim to the house. I don't want this to get ugly as we are family. I don't even want to force a sale of the house, but I'm not willing to forfeit my stake in it either, it's a substantial amount of money.

Again, its time to get an attorney involved even if it ends up getting ugly. One of three things has happened here, either the Trustee conspired with the beneficiary living in the house to cheat all of the other beneficiaries (even himself) from their eventual share of the home, or the Trustee got conned by the beneficiary into giving him the house free and clear and therefore cheating himself and the other beneficiaries, or the Trustee and the beneficiary living in the house where just so stupid that they did not understand what they were supposed to do and did it all wrong.

I do not see how you can fix things without it getting ugly...unless they flat out admit that they just messed up and are willing to do whatever is necessary to reverse everything. They are more likely to do that if the rest of the beneficiaries get an attorney involved.

 

[NIV]

Are you SURE it was a quit claim deed and not a life estate deed?

Are you (The OP) a beneficiary or a contingent beneficiary?

Do you have a copy of the trust yet?

 

[juliaq]

It is definitely a quitclaim deed. My brother ordered a certified copy of it through the the county recorder.

I am a beneficiary of the trust. When my uncle passed away we each recieved a monetary payout. All 7 of us recieved an equal amount.

My cousin responded to our concern by saying he deeded the house to his brother living in the home as a way to legally transfer the responsibility of property taxes to the person living in the home, so the trust is no longer responsible for that. He is in the process of closing the trust since there are no more assets in it.

This does not sit well with my siblings and I, we will be meeting next weekend to discuss our next steps. My brother has a copy of the trust, he will bring it with him. Looks like we are headed for a legal battle.

Thank you all for your advice.