Schlossberg v. Estate of Kaporovsky, — So. 3d — , 2020 WL 4496139 (Fla. 4th DCA Aug. 5, 2020)
November 19, 2020
In this recent decision, the Fourth District Court of Appeal reviewed the requisites for execution of a deed. The Fourth District explained that where all essential legal requisites are present, legal title is conveyed, and that void deeds would be limited to forged deeds or deeds that violate constitutional homestead protections. Here, the trustees signed a deed transferring a condominium out of the trust to the settlor, and a beneficiary then challenged the validity of the deed. Due to the unique nature of the revocable trust involved and the settlor’s right to control the disposition of her own property, namely her condominium, the appellate court found that the trial court erred in declaring the deed void.
In making this analysis, the Fourth District noted that while the trust itself provided that it could be revoked, in whole or in part, by an instrument in writing delivered to the trustees, but did not describe the specific form of that written instrument. “Ordinarily a power to revoke the trust will be interpreted as including a power to revoke the trust in part by withdrawing a part of the trust property from the trust.” Restatement (Second) of Trusts § 330 (1959). Essentially, the court construed the deed withdrawing the condominium from the trust as such written instrument. It was executed by both co-trustees and the settlor. It had the effect of removing the condominium from the trust. Thus, the settlor revoked the trust in part, as to the condominium.
The Court considered this alternate analysis as well, as the parties agreed that the trustees could convey the condominium to the settlor, and did so through a 2005 deed. This would also have been considered an application of trust assets for the settlor’s use, and which the trustees were specifically permitted or authorized to do through conveyance of property. Therefore, the co-trustees could have conveyed the property to the settlor, thereby removing the condominium from the trust, and then the settlor could have conveyed the property free of trust to herself for life with remainder to whomever she wished.
The Fourth District further explained that:
[T]he trustees had the authority to convey the property to the settlor within the terms of the trust, either as a principal distribution for her use or as a partial revocation of the trust. Then the settlor, individually could have conveyed the property to herself for a life estate, remainder to her daughter. Therefore, when the quitclaim deed was executed by both trustees and by the settlor individually, the deed accomplished with a single conveyance the same requirements as two separate conveyances. We see no need to demand two separate conveyances.
The court concluded that the title was valid, and that purchase was made for value. The deed was not defective and the trustees did not act without authority in this case. The trial judge was reversed, and the case remanded to the trial court to enter a judgment declaring that Schlossberg was the rightful owner of the entire condominium.
As a trustee charged with fiduciary obligations, you should consult with a trust lawyer to assure you are in compliance with all Florida statutory requirements, including if you are considering any conveyances of trust property