Failure to Deliver: The Problem with "Pocket Deeds" and a Review of Alternatives.

Author:Stachel, Kara L.
Position:Real Property, Probate and Trust Law
 
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A common issue plaguing estate planning attorneys and title attorneys is the "pocket deed" (a nondelivered deed), which is a deed executed by a titleholder during his or her life, where the grantor instructs the deed to be delivered to the grantee upon the titleholder's death or some other condition. The titleholder's intention, in these types of cases, is typically to retain ownership of the property until death and to then have the deed delivered to the grantee at a later time. The problem with this type of deed is that "[w]ithout delivery, nothing passes to the grantee." (1) If the grantor dies after he or she executes the deed, but prior to delivery of the deed to a grantee, the conveyance is ineffective. This article discusses the various consequences that arise from pocket deeds, including ineffective delivery by the grantor and acceptance by the grantee, and how delivery and acceptance of title may be made during the grantor's lifetime to avoid these issues, while still allowing the grantor to retain ownership of the real property that is described in the deed.

Discussion

* The Conveyance of Real Property Is Effectuated by Both the Delivery of a Deed from the Titleholder of the Real Property and Acceptance by the Grantee--Delivery of a deed by the titleholder/grantor and acceptance by the grantee is essential to transfer title to the grantee. (2) In Bould v. Coe, 63 So. 2d 273 (1953), grantors, Mr. and Mrs. Coe, executed a deed to Mrs. Bould. Mr. Coe passed away and was survived by Mrs. Coe, who intended to hold onto the deed until her death, at which time she intended it to be given to Mrs. Bould. The Florida Supreme Court held there was no delivery, even though it was evident Mrs. Coe intended Mrs. Bould to take possession of the subject property upon Mrs. Coe's death. (3) Similarly, in Jeffords v. Jeffords, 148 So. 2d 43 (Fla. 1st DCA 1962), the court held:

It has long been the law of Florida that it is essential to the validity of a deed of land that there be a voluntary delivery of it by the grantor to the grantee or to someone on his behalf, and an acceptance thereof by him with the mutual intention of the parties to pass title to the land. A deed takes effect upon delivery and nothing passed until delivery is effectuated.

In Jeffords, appellees, Louise Jeffords, the widow of grantor, S.M. Jeffords, and children of Roy Harold Jeffords, a deceased son of S.M. Jeffords, disputed whether a deed from S.M. Jeffords, purporting to convey his homestead property, was validly delivered to Roy Harold Jeffords. Louise Jeffords testified the deed was executed by her and her husband, S.M. Jeffords, but remained in her personal possession until after her husband's death. After the death of S.M. Jeffords, the deed was delivered to co-appellee, Roy Harold Jeffords' wife, Lillie Bell Jeffords, "with instructions that it be placed in the bank for safekeeping, but not recorded...." Instead, the deed was recorded several months later "without the knowledge or consent of Louise Jeffords." (4) Moreover, the notary testified he prepared the deed at issue and signed the deed as a notary and witness at Louise and S.M.

Jeffords' home, where they also signed the deed at issue. He testified that he forgot his notary seal at the time and took the deed to his office to affix the notary seal. He further testified that prior to leaving the Jeffords home, after he executed the deed, S.M. Jeffords asked the notary to give the deed to the grantee without recording it and that he followed these directions by mailing the deed to Roy Harold Jeffords after affixing the notary seal. Based on the conflicting testimony of Mrs. Jeffords and the notary, the court held a genuine issue of material fact existed, reversed the order of summary final judgment in favor of appellees and, importantly, noted: While having no bearing on the issue immediately before us, we take this opportunity to observe that this case provides a classic example of the confusion, expense, bitterness and delay that so often results when a layman undertakes to practice law. It seems clear that witness H.N. LeRoy, armed with a commission as a notary public, considered himself fully competent to prepare a deed carrying out the intentions of Mr. and Mrs. Jeffords. The ineptness with which he performed that service raises a strong inference that he lacked that training in the law which is so essential to the equipment of one who undertakes to perform that type of service. (5)

The actions of the notary demonstrate the importance of hiring a competent attorney to handle real estate and estate planning matters. Specifically, had the Jeffords hired an attorney to handle this matter and had the attorney taken over contract of the deed by placing it in escrow until a specified time or occurrence, they likely would have avoided the consequences that followed the execution of their deed.

* The Delivery Requirement Can Be Satisfied, Even When a Condition Is Imposed by the Grantor, When the Proponent of the Deed Can Demonstrate the Grantor Relinquished All Control as to Satisfaction of the Condition Requirement, and the Ability to Revoke the Deed--The requirement for a condition precedent to be satisfied, such as payment for a conveyance of real property, is certainly not unusual; however, instances in which the condition is not to be satisfied until after the death of the grantor may be sufficient to satisfy the delivery requirement of a deed to a grantee. The proponent of the deed bears the burden of proving 1) the condition was dependent upon some action or nonaction by the grantee; and 2) the grantor had relinquished all control over the satisfaction of the condition and the ability to revoke the deed. (6)

Videon v. Cowart, 241 So. 2d 434 (Fla. 1st DCA 1970), involved a dispute between siblings, as to the delivery of a deed executed by their father. T.B. Videon executed a...

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