Chapter G. Deeds

• Jurisdiction: Washington

G DEEDS

G.1. In General

The following discussion (in §§G.l. through G.5.) applies to all deeds except a transfer-on-death (TOD) deed, a form of nonprobate asset authorized as of 2014. As a TOD deed requires special formalities and has special consequences, it will be discussed separately in §G.6.

A (non-TOD) deed can be a will substitute in that it may pass an interest in the property in question immediately but retain for the grantor a life interest, including possession of the property and its income. If the grantor actually intends that no interest pass until death, then the deed is testamentary and, if not in compliance with the formal requirements for wills, invalid.²³⁰ If such a testamentary deed does comply with those formalities, it then is revocable just as would be any other will.²³¹ Only if the deed passes a "present interest" (i.e., a presently effective interest) in the property to the grantee does it avoid being testamentary and revocable.²³²

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G.2. The Grantor's Intent; Delivery

The issue with respect to a deed is always one of the grantor's intent: if he or she intended to relinquish complete dominion and control over the property at the time of the execution or delivery of the deed, then the deed becomes effective at that time (or at least at the time of delivery) and is not testamentary²³³ It is irrelevant that the grantor later changes (or appears to change) his or her mind, because the deed once effectively delivered is irrevocable and not subject to withdrawal or cancellation without the consent of the grantee.²³⁴ Thus the grantor's subsequent attempts to transfer the property to another person by deed or will,²³⁵ or to destroy the deed,²³⁶ or to lease or mortgage the property,²³⁷ cannot change the original effect of the deed. Such attempts sometimes will be taken, however, as evidence of lack of an original intent to part with dominion and control.²³⁸

The irrevocability of an immediately effective deed, as contrasted with the revocability of a testamentary one, illustrates the difference between a deed and a will: only the latter is ambulatory prior to the testator's death.²³⁹

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If the intent is clearly shown to make a present transfer of an interest, it is not necessary that the deed be physically delivered to the grantee, or even that it leave the grantor's possession.²⁴⁰ Retention of the deed by the grantor, however, may be evidence of lack of intent to "consummate the transaction" presently,²⁴¹ whereas possession of the deed by the grantee may create a "strong presumption" of valid delivery and a present transfer.²⁴² Possession of the property itself by the grantee, with the grantor's knowledge, especially combined with the making of improvements on that property by the grantee, is also strong evidence of a present transfer, despite the deed's retention by the grantor.²⁴³

To determine the grantor's intent, it is necessary to look to the effect and operation of the instrument, according to its own terms, rather than to its form alone.²⁴⁴ The interest that passes must survive the death of the grantor, and thus it cannot be, for example, a leasehold terminable on the lessor's death.²⁴⁵

A grantor who makes a present transfer may retain a life interest in the property without rendering the transfer testamentary. This makes a deed a true will substitute, as possession and enjoyment by the grantee are postponed until the death of the grantor.²⁴⁶ Any proceeds from the grantor's dealing with the property would belong to the grantee to the extent that they were part of the remainder interest.²⁴⁷

Because a valid deed passes a present interest and is irrevocable, if a subsequent will makes the same disposition of the property, the deed controls and the grantee takes under the deed, even if the actual delivery to the grantee occurs after the grantor's death.²⁴⁸ This could be crucial if, for example, the will contained a condition (such as a no-contest clause) that was violated by the beneficiary/grantee.²⁴⁹

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In Young v. O'Donnell²⁵⁰ the court set out four reasons why the deed in question was considered testamentary: the deed was expressly to take effect only after the grantor's death; the grantor reserved not only a life estate but absolute control over the property during his lifetime; the deed was to be null and void if the grantee predeceased the grantor; and the grantor purported to convey the same property to another person after the first deed was executed. At least the first three of these factors would usually be sufficient by themselves to render the deed testamentary; the deed in Young was a "checklist" of how not to pass a present interest.²⁵¹

Sometimes the court can be extremely narrow in its interpretation of delivery, as when one court found no delivery (and no other evidence of intent to make the deed "presently operative") when the testator, during her last illness, told her son that there were two deeds in a box, one for him and one for his wife, and that she wanted him to take the box and to straighten out her affairs. The court held that, because the testator told her son to take only the box, and not the deeds, there was no effective delivery of the deeds, because "mutual" intention to pass a present title was missing.²⁵² But other cases take quite a liberal approach to the question of intent and may find it implied despite positive evidence to the contrary²⁵³ Each case is very much dependent upon its own facts.

G.3. Delivery to a Third Party

It is quite possible for the grantor to deliver the deed to a third party (in effect to place it in escrow) with instructions that it not be delivered to the grantee (or even made known to the grantee) until the grantor's death, and still have made a present, nontestamentary transfer to the grantee. Again it is a question of the grantor's intent, as derived from the facts of the individual case. As long as the grantor has given up dominion and control over the property, use of such an escrow agent is not a testamentary act.²⁵⁴ Even if the third

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party misunderstands the grantor's instructions or would be willing to return the deed to the grantor if asked, the intent of immediate transfer will control.²⁵⁵ However, if the grantor in fact intended to retain control over the deed and the disposition of the property, there is no present transfer.²⁵⁶

The intent of the grantor to make a present transfer by delivery to the escrow agent may be implied from the circumstances and the conduct of the grantor, and it need not be expressed.²⁵⁷

G.4. Contingent Delivery

If the deed itself or its delivery is contingent on some event that may not occur, such as the grantee's surviving the grantor, this generally will render the deed testamentary²⁵⁸ Thus when mutual deeds are executed, with the intent...