Legal Question in Real Estate Law in California

Re: Trustee vs. Owner Status?

Someone who is not "on the deed" may in unusual circumstances be the owner.

Let me explain a bit. First, the term "on the deed" is imprecise. A deed is a one-use instrument whose sole purpose is to convey title, or an interest in title. A deed is rather weak evidence of ownership. Legal title to real property is better shown by searching official records at the county recorder's office, which may show later deeds, or that the person who executed the deed did not have the ownership necessary at the time the deed was executed and delivered, etc.

Next, it is possible that the "legal owner" as shown by a thorough, professional search of recorded documents is not the "true" owner because someone else is the so-called beneficial or equitable owner. This can occur because of fraud, mistake, estoppel, unrecorded instruments of which the legal owner had actual or constructive notice, and otherwise.

So, the answer here has to be that the adult child is not necessarily just blowing smoke.

The claim to be a trustee warrants some comment. There are several kinds of trustees, including trustees under a deed of trust; trustees of a true, declared trust; and an involuntary trustee of a trust arising by legal presumption.

A trustee under a deed of trust is not a true trustee, nor does giving a deed of trust truly create a trust. In this context, the words trustor, trustee and beneficiary are merely a convenient set of terms to apply to a three-party financing arrangement that bears a second-cousin relationship to a real trust. If this is what the adult child has in mind, you should know that he has no powers or duties until there is a foreclosure and can be replaced by the beneficiary at any time.

If the supposed trust of which the adult child is trustee is a true trust, such as one set up as a testamentaty vehicle, the questions arise whether the trust is irrevocable or not, whether the adult child is currently the trustee or merely becomes trustee upon the parent/trustor's demise, and what powers are given the supposed trustee at present under the terms of the trust instrument.

All of these questions are appropriately addressed only by an attorney who has had a chance to review any trust documents and has access to title records. However, I hope this rather general discussion is helpful in pointing you in the right direction.

Re: Trustee vs. Owner Status?

Someone who is not "on the deed" may in unusual circumstances be the owner.

Let me explain a bit. First, the term "on the deed" is imprecise. A deed is a one-use instrument whose sole purpose is to convey title, or an interest in title. A deed is rather weak evidence of ownership. Legal title to real property is better shown by searching official records at the county recorder's office, which may show later deeds, or that the person who executed the deed did not have the ownership necessary at the time the deed was executed and delivered, etc.

Next, it is possible that the "legal owner" as shown by a thorough, professional search of recorded documents is not the "true" owner because someone else is the so-called beneficial or equitable owner. This can occur because of fraud, mistake, estoppel, unrecorded instruments of which the legal owner had actual or constructive notice, and otherwise.

So, the answer here has to be that the adult child is not necessarily just blowing smoke.

The claim to be a trustee warrants some comment. There are several kinds of trustees, including trustees under a deed of trust; trustees of a true, declared trust; and an involuntary trustee of a trust arising by legal presumption.

A trustee under a deed of trust is not a true trustee, nor does giving a deed of trust truly create a trust. In this context, the words trustor, trustee and beneficiary are merely a convenient set of terms to apply to a three-party financing arrangement that bears a second-cousin relationship to a real trust. If this is what the adult child has in mind, you should know that he has no powers or duties until there is a foreclosure and can be replaced by the beneficiary at any time.

If the supposed trust of which the adult child is trustee is a true trust, such as one set up as a testamentaty vehicle, the questions arise whether the trust is irrevocable or not, whether the adult child is currently the trustee or merely becomes trustee upon the parent/trustor's demise, and what powers are given the supposed trustee at present under the terms of the trust instrument.

All of these questions are appropriately addressed only by an attorney who has had a chance to review any trust documents and has access to title records. However, I hope this rather general discussion is helpful in pointing you in the right direction.