Asserting or Defending Claim Regarding Ownership of Trust Property
- Any Claim Involving Trust Property (Other Than Creditor’s) Claim Can Be Brought Under Prob Code § 850.
Prob Code § 850 is, in effect, a procedure for quieting title to trust property.
Prob Code § 850 et seq. do not create or supplant substantive law. Rather, Prob Code § 850 is a procedural mechanism for raising title or possession issues. Thus, virtually any claim that involves trust property can be brought under Prob Code § 850. The elements of the claim under Prob Code § 850, as well as the applicable statutes of limitation, are controlled by the law applicable to the underlying claim.
- Claims for Title to or Possession of Real or Personal Property.
A proceeding to challenge title to or possession of real property may be brought under Prob Code § 850 by a trustee or other interested person to reclaim property on behalf of the trust [Prob Code § 850(a)(3)]. It also may be brought by a third party against a trustee to reclaim property incorrectly held in the trust. If a trustee is unwilling to bring such a claim, or it would be futile to seek relief from the trustee, an interested person may bring the action on behalf of the trust [Estate of Myers (2006) 139 CA4th 434, 42 CR3d 753].
- Challenge to Existence of Trust or Conveyance to or From Trust.
A petition under Prob Code § 850 may challenge the validity of a trust or seek to set aside conveyances to or from the trust based on lack of capacity, fraud, or undue influence [Estate of Young (2008) 160 CA4th 62, 72 CR3d 520; Conservatorship of Romo (1987) 190 CA3d 279, 235 CR 377].
In addition, a “Heggstad petition” can be filed under Prob Code § 850 for an order determining that title to real or personal property is held in trust. A Heggstadpetition is proper when the settlor created an inter vivos trust with himself or herself as trustee [see Prob Code § 15200(a)], and intended that specific property was held as a trust asset, but title to the property was never formally transferred to the trust [Estate of Heggstad (1993) 16 CA4th 943, 20 CR2d 433]. However, Prob Code § 850is not limited to Heggstadsituations, and can be used to determine property ownership in circumstances beyond the Heggstadfact pattern, as discussed below[seeProb Code § 850(a)(3)].
- Enforcement of Specifically Enforceable Contractual Obligations Affecting Trust Property.
A person can seek specific performance under Prob Code § 850(a)(3)when a contractual obligation to transfer property is owed to or by the settlor or trustee of a trust [Prob Code § 855;Estate of Young (2008) 160 CA4th 62, 72 CR3d 520; Estate of Myers (2006) 139 CA4th 434, 42 CR3d 753]. This may include, among other matters, claims regarding enforcement of an alleged contract to make a will with respect to property claimed to be in the trust.
- Totten Trust Disputes.
Disputes involving Totten trusts can also be resolved through a Prob Code § 850petition when a decedent is involved [seeEstate of Fisher (1988) 198 CA3d 418, 244 CR 5].
- Spousal Property Claims.
A petition under Prob Code § 850can be used to litigate claims between an estate and a surviving spouse regarding ownership of property [seeHeiser v. Superior Court (1979) 88 CA3d 276, 151 CR 745].
- Marvin Rights for Unmarried Cohabitants.
Neither the Family Code nor the Probate Code provide for financial support for unmarried cohabitants. However, the California Supreme Court has recognized the enforceability of express contracts between nonmarital partners [Marvin v. Marvin (1976) 18 C3d 660, 134 CR 815, 557 P2d 106]. Contract claims of this nature could also be asserted in the context of a Prob Code § 850proceeding [Prob Code §§ 850(a)(3), 855;Estate of Young (2008) 160 CA4th 62, 72 CR3d 520]. As a result, Marvinclaims are often raised in a Prob Code § 850petition.
- Joint Tenancy Disputes.
Prob Code § 850 proceedings can be used to litigate disputes over property held in joint tenancy, including determinations regarding the termination of the joint tenancy [seeEstate of Gebert (1979) 95 CA3d 370, 157 CR 46].
- Title by Adverse Possession.
A petition under Prob Code § 850can be filed by a person claiming entitlement to property by adverse possession [seeEstate of Secreto (1982) 134 CA3d 938, 184 CR 873].
- Unlawful Detainer and Related Issues.
While no reported authority expressly validates this position, it is arguable that a Prob Code § 850action may be used as an alternative for an unlawful detainer action when a beneficiary is occupying a house belonging to the trust and refuses to move out.
- Elder Abuse Claims.
A petition under Prob Code § 850seeking recovery of wrongfully taken property may also include related causes of action for financial abuse, neglect, or physical abuse of an elder or dependent adult under W&I Code § 15600 et seq.[Prob Code § 855].
- Creditor’s Rights.
In limited circumstances, creditors maintain standing to assert claims under Prob Code § 850[Prob Code § 48(a); Estate of Myers (2006) 139 CA4th 434, 42 CR3d 753].
- Revocable Transfer on Death (TOD) Deeds.
Although the issue has not yet arisen due to the recent enactment of revocable transfer on death deeds (revocable TOD deed) [seeProb Code § 5614(definition); Stats 2015 ch. 293; see alsoProb Code § 5600 et seq.], it is likely that issues regarding a trust’s ownership of property subject to a revocable TOD deed could arise in a proceeding under Prob Code § 850.
A revocable TOD deed is an instrument by which an owner of real property makes a donative transfer of that property to another person, to take effect on the transferor’s death. During the transferor’s lifetime, the transferor retains full ownership of the property, and the transfer remains revocable [Prob Code § 5614(a)]. Thus, it is similar in some ways to a joint tenancy, and in others to a revocable trust.
- Enhanced Remedies:A further advantage is that Prob Code § 859 provides for double damages against any person who, in bad faith, has wrongfully taken, concealed, or disposed of property belonging to a conservatee, a minor, an elder, a dependent adult, a trust, or a decedent’s estate. Prob Code § 859also provides for double damages against any person who has taken, concealed, or disposed of the property by the use of undue influence in bad faith, or through the commission of elder or dependent adult financial abuse, as defined inWelf & Inst Code § 15610.30[Prob Code § 859];see 11].Prob Code § 859states that “the person shall be liable for twice the value of the property recovered by an action under this part.” Damages awarded under Prob Code § 859are considered statutory damages rather than punitive damages, and are recoverable against a successor in interest of a deceased respondent [Hill v. Superior Court (2016) 244 CA4th 1281, 1285, 198 CR3d 831; seeCCP § 377.42].
In addition, except as otherwise required by law, the prevailing petitioner, in the court’s discretion, may recover reasonable attorney’s fees and costs [Prob Code § 859].
The remedies provided in Prob Code § 859are in addition to any other remedies available in law to a person authorized to bring an action under Prob Code § 850 et seq., including but not limited to a trustee, guardian, or conservator, or personal representative or other successor in interest of a decedent [Prob Code § 859;seeProb Code § 850 for list of persons authorized to bring an action].