Husband and wife signed eight deeds to Furnas county real estate at the time they created a revocable living trust in 2008. The deeds, however, were not recorded and possession of the deeds was unclear from the record. Later that year, they mortgaged the real estate. They continued to pay the taxes on it and farm it.
In the 2008 trust, three of the couple’s children were disinherited.
After the husband died in 2011, the wife executed a new revocable living trust that included the grandchildren of the three disinherited children as beneficiaries. But, again, no deeds were recorded.
After mom died in 2013, one son recorded the 2008 deeds.
The Nebraska Court of Appeals held that an unrecorded deed in possession of the grantor at time of death is conclusive proof that the parties did not intend to complete the transfer. For a deed to be valid, it must be delivered. Recording a deed generally presumes delivery.
- It is essential to fund a trust and for real estate that means recording the deed.
- Notice how the wife changed the terms of the couple’s estate plan after her husband died. I wonder if an irrevocable pure grantor trust (IPug) would not have been better in this case.
- An Omaha lawyer drafted the estate plan and another Omaha lawyer probated the estate. Nebraskans outside of Omaha frequently hire Omaha lawyers.
- A whole lot of litigation resulted from the failure to complete a simple task. The record was unclear about why the deeds weren’t recorded in 2008. It might have been lawyer neglect, an oversight by the couple or they just held the deeds with the intent to record them at some later time. This ambiguity could easily have been remedied and no litigation would have occurred.
Source: Bayliss v. Clason, 26 Neb. App. 195 (August 15, 2018).