Saturday, January 5, 2013

A Trust Is Still Not A Legal Entity Under Georgia Law - Bryan Cave ...

It?s a pretty common mistake for litigators in Georgia unfamiliar with fiduciary litigation ? naming a trust as a party to a lawsuit.? Apparently, as we recently saw in Ford v. Reddick, it?s a mistake made in real estate transactions, too.

It?s hard to blame them because, on the surface,?the Georgia Code?s many references to trusts may unwittingly suggest to some that a trust is itself a legal entity. ?But, under Georgia law, it?s not.

So what tripped up the real estate transaction in?Ford?

It?s a straightforward set of facts. ?Kaiser Ford, as attorney-in-fact for Ruby Lee Gloster, executed two warranty deeds conveying Gloster?s real property to ?Morison Outreach, a Trust.? ?Gloster sued to set aside those deeds. ?Gloster contended that the deeds were invalid as they conveyed property to a trust instead of a trustee. ?The trial court and Georgia Court of Appeals agreed.

It?s well-settled law that a deed that does not properly designate a grantee does not convey title. ?Under Georgia?s Trust Code, in order for a deed to convey property to a trust, the trustee must be designated as the grantee of legal title. ?In other words, when it comes to property transactions in Georgia, a trust can only convey or receive property through its trustee.

Source: http://bryancavefiduciarylitigation.com/a-trust-is-still-not-a-legal-entity-under-georgia-law

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