Legal Question in Real Estate Law in California

Possibly, but I can see several potentially serious problems that may affect the validity of the deed and the transaction.

First the holder of a power of attorney is called an "attorney-in-fact;" that's what you are in this transaction. Just wanted to make sure you understood the term.

An attorney-in-fact must execute a deed of his principal's property in a certain way, set out in the Civil Code at section 1095:

"� 1095. Attorney in fact; execution of instruments Attorney in fact, how must execute for principal. When an attorney in fact executes an instrument transferring an estate in real property, he must subscribe the name of his principal to it, and his own name as attorney in fact."

Case law shows that courts are quite strict about enforcing this, and a deed not executed as required in CC 1095 will be void. See Morrison v. Bowman (1865) 29 Cal. 337.

Next, the Probate Code covers powers of attorney and attorneys-in-fact. There are several statutory requirements that attorneys-in-fact must follow in dealing with their principals' property, including record-keeping and caring for the property as would a prudent person dealing with the property of another (Probate Code section 4231). In particular, Probate Code section 4264(c) prohibits an attorney-in-fact to make a gift of the principal's property unless the gift is specifically authorized in the power of attorney. The California Uniform Statutory Form Power of Attorney does not, for example, contain anything authorizing gifts.

Your question does not mention whether your transfer of your mother's house to your sister and yourself included a payment of its fair market value. To the extent fair market value was not paid, you made an illegal gift under 4264(c) unless it was specifically authorized in the power of attorney. It would be just as illegal if your mom authorized it orally: "Attorney-in-fact's gift to himself, made outside scope of authority granted under power of attorney, was void, even though made under principal's express oral direction. Estate of Huston (1997) 51 Cal.App.4th 1721."

Note that there is a new section in the Probate Code, 4231.5, added by the statutes of 2010, providing substantial penalties for attorneys-in-fact who violate their duties in carrying out their responsibilities. Subsection 4231.5(c) includes a penalty of twice the value of the property wrongfully taken from the principal:

"� 4231.5. Breach of duty; chargeability; excuse; additional remedy for bad faith

"(a) If the attorney-in-fact breaches a duty pursuant to this division, the attorney-in-fact is chargeable with any of the following, as appropriate under the circumstances:

"(1) Any loss or depreciation in value of the principal's property resulting from the breach of duty, with interest.

"(2) Any profit made by the attorney-in-fact through the breach of duty, with interest.

"(3) Any profit that would have accrued to the principal if the loss of profit is the result of the breach of duty.

"(b) If the attorney-in-fact has acted reasonably and in good faith under the circumstances as known to the attorney-in-fact, the court, in its discretion, may excuse the attorney-in-fact in whole or in part from liability under subdivision (a) if it would be equitable to do so.

"(c) If a court finds that a person has in bad faith wrongfully taken, concealed, or disposed of property belonging to a principal under a power of attorney, the person shall be liable for twice the value of the property recovered by an action to recover the property or for surcharge. The remedy provided in this section shall be in addition to any other remedies available in law to the principal or any successor in interest of the principal."

Finally, I should mention that your "reason" for transferring the property -- that your brother was going to "steal" it -- doesn't seem to make much sense. Real property cannot be the subject of theft. This is a basic fact all attorneys learn in their first-year studies of criminal law. How, exactly, would he steal it? By deeding it to himself? Fortunately, you seem to have beaten him to the punch.