Is the associated pour-over will superfluous if the settlor of a revocable inter vivos trust and the trustee hold all the settlor’s property jointly with right of survivorship?

Charles E. Rounds, Jr. - Suffolk University Law School

Could re-titling an item of one’s property into joint name with the trustee of one’s revocable inter vivos trust render the pour-over will superfluous as to that item? In a good Property text, not the Uniform Trust Code, is where one should look for answers. It is drilled into every first-year law student that a valid joint tenancy with right of survivorship has four unities: Unity of time, unity of possession, unity of title, and unity of interest. Unity of interest means that a cotenant has exactly the same rights in his proportional interest as the other cotenants have in theirs. In other words, all interests are doctrinally equal, that is the cotenants have estates of the same type and duration. Could a non-trustee settlor, then, hold property jointly with a trustee where the interest is coupled with a right of survivorship? Probably not. The two parties by default would hold the subject property as tenants in common. Too bad, at least as a practical matter, as such an arrangement might have made an interesting substitute for the pour-over will. The problem is that the interests of the individual and the trustee, while concurrent, would not be doctrinally equal in that the duration of the modern trust tends not to be tied to the lifespan of the trustee. Recall that a trust shall not fail for want of a trustee.

At common law, a corporation and an individual could not hold property as joint tenants but only as tenants in common. This is because a corporation might have a life of unlimited duration that would defeat the individual's right to survivorship. See generally 2 Scott on Trusts §103.1 n.1 and accompanying text [Fratcher ed.]. By analogy, this principle ought to apply to the trust as well. On the other hand, it is settled law that a corporation and an individual may serve together as co-trustees, and in their fiduciary capacities hold legal title jointly. In this regard, see § of Loring and Rounds: A Trustee’s Handbook (2024), which section is reproduced in the appendix below.

In Grout as Trustee of Helen Schardein 2018 Rev. Trust, 985 N.W.2d 144, 149 (Iowa 2023), an elderly settlor transferred all her real and personal property to the trustee of her revocable trust, to include a parcel of real estate that she had owned jointly with right of survivorship “with a man who…[had been]… providing various services for her.” Upon her death the parcel was sold. The man asserted that he was entitled by right of survivorship to all the sale proceeds. The trustee disagreed. The Court held that given the inter vivos conveyance to the trustee, “it makes no sense to suggest that the Trust could now hold a property as a joint tenant with right of survivorship. The trust is not a natural person and doesn’t ‘die.’” The transfer of the interests in the joint tenancy to the trustee was held to have effected at the time of transfer a termination of the joint tenancy and an equal partitioning of the subject property.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Charles E. Rounds, Jr. - Suffolk University Law School

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