## Facts

- Alma Uber created a revocable living trust to manage her assets and named her son, Lloyd Uber, as trustee.
- Alma physically handed Lloyd jewelry and two certificated shares of The Price Company stock for the trust; the stock certificates were not endorsed or otherwise formally transferred.
- The trust originally provided that, at Alma’s death, trust assets would be distributed to Lloyd and his brother, Gordon Uber.
- Alma later became incompetent, and Lloyd was appointed Alma’s conservator and attorney-in-fact, giving him authority to act for her.
- Lloyd formally relinquished his own beneficial interest in the trust, leaving Gordon as the sole beneficiary.
- Acting as Alma’s attorney-in-fact, Lloyd executed quitclaim deeds transferring Alma’s interests in two parcels of real property to “Lloyd Uber, as trustee” of Alma’s trust; the deeds were recorded.
- Horst Hoffmann obtained a legal-malpractice judgment against Lloyd.
- After Alma’s death, Lloyd, as trustee, executed quitclaim deeds transferring the trust-held real property to Gordon as beneficiary.
- Hoffmann attempted to satisfy his judgment by reaching the assets associated with the trust, arguing the trust was invalid or not funded and that the disputed property should be available to Lloyd’s creditor.
- The trial court ruled the trust was valid, treated the real property and the two stock certificates as trust assets, and rejected Hoffmann’s creditor claim; Hoffmann appealed.

## Issues

1. Whether the trust was effective as to assets transferred into it by recorded deeds, so that a judgment creditor of the trustee (who had renounced his beneficial interest) could not reach those assets.
2. Whether physical delivery of certificated stock to the trustee, without endorsement or other transfer formalities, placed the stock into the trust.
3. Whether an alleged defect in transferring some assets into the trust allows a creditor to treat other assets that were transferred by deed as reachable to satisfy the trustee’s personal judgment debt.

## Decision

- The judgment was reversed only to the extent it determined the two The Price Company stock certificates were assets of the trust.
- In all other respects, the judgment was affirmed, including the determination that the real property transferred by quitclaim deeds to the trustee was trust property.
- The order denying Hoffmann’s motion for a new trial was affirmed.
- The parties were ordered to bear their own costs on appeal.

## Legal Principles

- A revocable living trust may be effective as to particular assets that are actually transferred into it, even if other intended assets are not successfully transferred.
- A transfer of real property into a trust is accomplished through executed conveyancing instruments (such as recorded deeds) that convey title to the trustee in that capacity.
- Certificated securities generally require endorsement and/or other legally recognized transfer steps; mere physical delivery of unendorsed stock certificates to a trustee does not, by itself, complete a transfer into the trust for purposes of treating the shares as trust corpus.
- A judgment creditor of an individual cannot satisfy the individual’s debt from property that belongs to a trust beneficiary other than the debtor, and challenges to “funding” do not make assets that were transferred by deed available solely because other items were not transferred.

## Conclusion

The Court of Appeal left intact the trial court’s ruling that the real property was placed into Alma Uber’s trust through recorded quitclaim deeds and could not be reached by Hoffmann to satisfy his malpractice judgment against Lloyd, who had given up his beneficial interest; however, it reversed the portion of the judgment treating the two unendorsed Price Company stock certificates as trust assets because the transfer formalities for certificated shares were not completed.


Uber v. Hoffmann, No. D037208, 2002 WL 199735 (2002)