Ms. Stephanie Coker's Guide : Caselaw

1999, Bankruptcy Case in the DCA, Fort Lauderdale Division

A deed that simply refers to the grantee as “trustee” conveys a fee simple estate with three exceptions; the three exceptions are: (1) the deed names the beneficiaries or states the nature and purpose of the trust; (2) the deed expresses a contrary intention; or (3) a declaration of trust is of record. F.S.2003, § 689.07(1).

Where complainant “as trustee” and certain defendants claiming a legal title through descent from one whose title to land was confirmed by the United States in 1825 had not asserted their rights until 1920, and others who claim adversely under a conveyance executed in 1832 have divided the land into city lots and blocks, and have, by executing conveyances and by giving or permitting liens, dealt with the lands and with the title as owners thereof, and the delay from 1832 to 1920 in asserting their rights by those claiming through descent and their predecessors in interest is unexplained or unexcused, held, that such delay, under the circumstances, while adverse rights were being asserted through such time, is prejudicial to the rights of adverse claimants, and constitutes laches making it inequitable to annul adverse claimant's title.

It is well established that there must be found within the four corners of a written instrument creating or declaring a private trust a beneficiary. The beneficiary need not be named, but must be so designated or described as to be identifiable; otherwise, the court cannot carry a trust into effect, however clearly it may be created in other respects.

A revocable trust designated the settlor as beneficiary and, thus, was not void ab initio for failing to name a beneficiary, even though the drafter failed to prepare and incorporate into the trust a schedule of beneficial interests that was to designate the remainder beneficiaries who would take the trust assets upon the settlor's death, where the trust designated the settlor as both the donor and the initial trustee and provided that the trustee was to hold for the benefit of the donor real property transferred to the trust by the donor; the settlor did in fact transfer her residence to the trust; the settlor had under the trust an absolute present possessory right to occupy the residence for the remainder of her life; the settlor had the right during her lifetime to withdraw the trust property; and the trustee was obligated under the trust to pay over to the settlor the income and principal of the trust as directed in writing by the settlor.

A trustee may be given power to appoint or select beneficiaries from a designated class.

A trust deed did not create a land trust under the Land Trust Act where the deed did not contain language that conferred on the trustee the power and authority either to protect, conserve and to sell, or to lease, or to encumber, or otherwise to manage and dispose of the real property described in the recorded instrument.

An unwitnessed assignment was effective to transfer a beneficial interest in property held under a so-called Illinois land trust, where the trust deed explicitly declared the interests of the beneficiaries thereunder to be personal property only, in that the statute provides that such a definition of beneficial rights will be controlling and in that an interest in intangible personal property is transferable by a simple assignment.

The Florida Land Trust Act was adopted as a method of encouraging land development. It permits a trustee holding legal and equitable title to the property of a land trust to convey freely without the joinder of spouses or beneficiaries, and allows third persons to deal with the trustee without having to inquire into the trustee's authority.

Under the “fiduciary exception” to the attorney-client privilege, which courts have applied in the context of common-law trusts, a trustee who obtains legal advice related to the execution of fiduciary obligations is precluded from asserting the attorney-client privilege against beneficiaries of the trust.

The form of a land trust is such that the land trustee, not the beneficiary (whoever that may be), has legal and equitable title to the real estate. But in considering the issue here, the Court is to “look through the form [of an Illinois land trust] to the substance of a transaction.” In re Langley, 30 B.R. 595, 599 (Bankr.N.D.Ind.1983).

A “land trust” is an arrangement under which legal and equitable title to real property is held by a trustee and the interest of the beneficiary is personal property. S.H.A. 765 ILCS 405/1.

Where under a land subdivision trust the buyers of lots make overpayments to the settlors-beneficiaries for lots, and the trustee repays these amounts, it should receive credit on its accounting for such payments.

A trustee of a land trust contracted to sell land to A and accepted payment of the price. Later a successor trustee was directed by the beneficiaries of the trust to convey the land to B, in violation of the obligations owed A, and this was done, and so the equity of A was cut off by the sale to a bona fide purchaser. The court held that the beneficiaries and the trustee were both liable for the damages caused A by this act.