Putting farm you do not own into a living trust

Question

Here is the deal:

Owner Adam of a farm gives the farm in 2003ish to son-in-law Hank via quit claim deed. Owner Adam becomes just Adam. Adam continues to live on the farm. New owner Hank doesn't record the deed with the county, but pays property taxes henceforth.

Fast Forward to 2014.

Subject Tango (Son of Hank) moves into farm. Tango apparently has a motive to acquire the farm and Adam (now 99 years old) decides they want Tango to have the farm.

Tango brings in an attorney and the farm is put into living trust without Hanks knowledge or consent. After Hank finds out, he believes that since Adam signed the quit claim deed they have no basis to put it into the living trust and the farm is still his.

Does Hank have the power to dispute the farm being in the living trust? Can there be consequences for the attorney who put the farm into the trust despite knowing there was a quit claim deed? Is the new quit claim deed inside the trust worthless or is the quit claim deed from circa 2003 worthless?

Thank you for any insight or information/experience you have.

Did Adam gain a leasehold or life estate in 2003 as part of the deal or after the quitclaim? (or in other words by what right did Adam continue to live on the farm?) If yes, then Adam's 2014 quitclaim could transfer those new rights to Tango. Both quitclaims could be valid, but for different property interests. — user662852, Aug 05 '15 at 19:17
I'll have to wait to ask. Adam continued to live there because he, his daugher, and son-in-law (hank) wanted him to spend his remaining days there, worry free. — KiloJKilo, Aug 05 '15 at 20:26

score 1 · Answer 1 · answered Aug 06 '15 at 00:03

There is a legal term for exactly what you describe: "a real mess".

Have a look at http://wiki.lawdepot.com/wiki/Quitclaim_Deed_FAQ_-_United_States#Property_Transfers

Does Hank have the power to dispute the farm being in the living trust?

Yes, anyone can dispute anything they like, however, it will almost certainly end in court and his prospects of success are OK at best.

Can there be consequences for the attorney who put the farm into the trust despite knowing there was a quit claim deed?

This rather begs the question: was there a quit claim deed? That is, I am not suggesting that there isn't a piece of paper so described but is it actually what it says it is at law?

Given that the answer to these questions is ambiguous; it would be difficult to state that the attorney has done anything that would be actionable.

Is the new quit claim deed inside the trust worthless or is the quit claim deed from circa 2003 worthless?

If they are valid then all they can do is transfer whatever interest Adam had in the land to Hank and Tango respectively.

If the 2003 deed is valid then Hank owns what Adam owned and all the new deed can do is transfer whatever rights remain to him (for example, a right to live there for the rest of his life).

It is important to remember that a quit claim deed does not make any claim that Adam has title to the land - I could give you a quit claim deed over it knowing that I really do not have an interest in it.

The Land Mines

Here are some of the legal issues that I can see

Registration with the country appears to be a prerequisite of a valid quitclaim deed
A quitclaim deed can only transfer whatever ownership Adam had in the land - it doesn't mean that other people (e.g. Tango) don't also have a claim
Did Hank/Tango use "undue influence" to induce Adam to sign the quitclaim deed?
Did Hank/Tango give "valuable consideration" to Adam?
Did Adam intend that the documents he signed would be legally binding?
Did Adam at 87/99 years old respectively have legal capacity to sign the deeds?

Your friend is going to need professional legal advice and needs to seriously consider the consequences to the family of initiating legal action - no matter who wins; relationships will be changed.

score 1 · Answer 2 · edited Jun 17 '20 at 08:31

Short Answer

The property belongs to the first to record their deed. In this case, the trust.

You didn't specify this in the question. But I assume the deed was recorded first by the trust because they had an attorney do it.

Explanation

If you possess a deed, you must record it for it to take effect. The reason for this is to prevent exactly the situation you describe from "clouding" the title. A deed is generally not a deed unless and until it's recorded.

Reference

Read this link. There, it says:

...if your deed is not recorded, there is nothing in the public record to stop the seller from conveying the property to another person.

Disclaimer

I am not an attorney. So don't follow my advice. Or any advice from a stranger on the internet. Hire a real attorney to handle your legal matters and treat this web site and my answer just like it came from one of your drunk friends at a party.