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31. Must the attorney deliver the deed to the daughter?
Shortly thereafter, the nephew died testate. In his will, he devised the farm to his daughter. Several years later, the man died intestate, survived by two sons. The nephew's daughter immediately claimed ownership of the farm and demanded that the attorney deliver the deed to her.
A man decided to give his farm to his nephew. The man took a deed to his attorney and told the attorney to deliver the deed to the nephew upon the man's death. The man also told the attorney to return the deed to him if he asked. None of these instructions to the attorney were in writing, and the deed was not recorded. The man then e-mailed the nephew informing him of the arrangement.
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But a death escrow is still effective as long as the grantor has no explicit right or power to do so. For example, the death escrow isn't effective if the grantor puts the deed in a safe deposit box with instructions to an agent to deliver the deed at his death but keeps a key to the box that would enable him to take the deed back before his death.
B is correct. When the man delivered the deed to his attorney with instructions to deliver it to the nephew on his death, he was attempting to create a valid death escrow. Neither a written nor an oral contract is required for a valid death escrow because most are gratuitous. To create a valid death escrow, however, the man had to place the deed beyond his control, reserving no power over it once it had been given to the attorney. Because the man instructed the attorney to return the deed to the man if he asked, the man did not place the deed beyond his control, and no death escrow was created.
A is incorrect. The escrow agreement itself may be oral, written or both. A gratuitous death escrow does not need to be supported by a written contract.
C is incorrect. If the grantor retains control over the deed, i.e., has the ability to recall or revoke the deed or otherwise to cancel the conveyance, a valid death escrow is not formed. It can only be valid if the conveyance is irrevocable and beyond the control of the grantor. Here, a valid death escrow was never created, and the subsequent death of the nephew is of no consequence.
D is incorrect. The deed was never legally delivered to the nephew. Because the man instructed the attorney to return the deed to the man if he so requested, the man did not place the deed beyond his control and no death escrow was created.