A testamentary trust is a common estate planning device. To fund the trust, the person establishing the trust must transfer his or her assets to the trustee of the trust. In a recent case, Kucker v. Kucker, the California Court of Appeal discussed the level of specificity required to make such a transfer effect with respect to shares of stock. The Court of Appeal concluded that a general assignment referring to all property is sufficient.
In the Kucker case, the person who established the trust (called “the Settlor”) signed a general assignment – a document that assigned all of her “right, title and interest in all property” she owned to the trustee. At the same time, the Settlor signed another document transferring shares of 11 specific stocks and funds to the trustee.
After the Settlor died, it was discovered that the Settlor owned other shares of stock at the time she established her trust. The successor trustee filed a petition asking the court to declare that those other shares were effectively transferred to the trust by the general assignment. The trial court denied the petition, stating that there could not be an assignment without a written document specifically describing the shares.
The Court of Appeal reversed the trial court’s decision. The Court of Appeal concluded that the general assignment was sufficient to establish the Settlor’s intent to transfer all of her property to the trust. The Court noted that a leading practice guide recommended that Settlors periodically sign a general assignment to ensure that property acquired since any prior assignment is effectively transferred to the trust. The Court concluded that nothing in California law required identification of specific shares in order to effectively transfer those shares to a testamentary trust.