Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Thursday, April 29, 2010

Death of Settlor of Revocable Trusts is a Change in Ownership

CaliforniaSteinhart v. County of Los Angeles, 223 P.3d 57 (Calif. 2010): The California Supreme Court held that a “change of ownership” allowing a taxing jurisdiction to reassess real property for purposes of taxation occurs at the death of the settlor of a revocable inter vivos trust which contains the settlor’s home even though the trust continues and gives a beneficiary the right to live in the home for life. When that beneficiary dies, the home is to be sold and the proceeds distributed to other beneficiaries. Because the settlor held the entire equitable estate in the residence, ownership of the residence was transferred at the settlor’s death.


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If trusts indicate that the home was held in trust to the homeowner as trustee, the principle of succession is that transfers occur at the moment of death - but to beneficiaries in equitable ownership, not to Executors or Successor Trustees - yet to be appointed properly by the court.

Because of succession laws and the need for privity of ownership, unless the trust in which property is held conveys to third party beneficiaries, states have no incentive to depart from the rules of property which stipulate that succession laws apply at the moment of death.

Posted by: Pat | Apr 30, 2010 7:13:25 AM

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