Opinion ID: 1855904
Heading Depth: 1
Heading Rank: 6

Heading: Contracts for Deed, Bank Accounts and Vehicles.

Text: Herbert Coe assigned and transferred three contracts for deed and certain bank accounts and vehicles to the trustee. At the time Herbert Coe signed the trust, Richard Nelson, representative of the trustee, signed the trust, but conditioned the trustee's acceptance of the trust by placing the following statement above his signature: Not effective until approved by bank counsel. Robert Maule, general counsel for the trustee, Farmers State Bank, subsequently reviewed the trust and attempted to condition acceptance of the trust property by placing the following handwritten note after the assignment of property portion of the trust: The acceptance of this assignment is conditionally limited until each specific item of property which is titled in its own right, such as motor vehicle titles, shares of stock in the Rosebud Lumber and Coal Company, signature cards evidencing transfer of bank accounts and certificates of deposit not otherwise excluded, is transferred to the said trust department. Acceptance of the assignment of contracts herein alone is conditioned upon the receipt of properly executed deeds transferring title to said trust department. The preconditions set by the trustee were apparently designed to insure that the trustee received legal title to property and not to disclaim it. Herbert Coe failed to meet the preconditions set by the trustee and the trial court excluded the titled property from the trust. We believe the trial court erred in excluding titled property from the trust because Coe failed to meet the preconditions. The Restatement (Second) of Trusts does not address the issue of preconditions set by the trustee for the acceptance of property, nor have counsel cited any pertinent authority. We note, however, that the Restatement (Second) of Trusts § 102(4) (1959) provides: A trustee cannot accept a trust in part and disclaim in part. Comment f to § 102 further explains this statement: If the trustee accepts the trust as to a part of the trust property, this is an acceptance of the trust of the whole trust property. The record reflects that the trustee accepted at least some of the trust property into the trust and placed conditions on the acceptance of titled property. We believe the preconditions the trustee placed on acceptance of titled property were ineffective in preventing transfer of that property into the trust. This does not mean, however, that the titled property was transferred to the trustee. Legal title in the property must pass to the trustee before it becomes trust property. 76 Am.Jur.2d Trusts §§ 35-36. Our inquiry focuses on whether the trustee received legal title to the disputed items of property.