Delivery of Deed

Rothrock v. Rothrock, 104 S.W.3d 135 (Tex. App.—Waco 2003, pet. denied).


Settlor established a trust which included Settlor’s residence. Settlor served as the trustee of the trust. In 1977, Settlor in both his individual and representative capacities signed a deed conveying the residence to a corporation wholly owned by Settlor’s Wife. Settlor gave the deed to Wife but told her not to record it until Settlor died. Twenty years later, Wife’s child by a prior marriage heard rumors that Settlor wanted Wife to return the deed. Wife’s child found the deed and gave it to an attorney for safekeeping. Settlor filed a copy of the deed and an affidavit explaining that he had not delivered the deed and that the deed was void. After Settlor’s death, the original deed was properly filed. Beneficiaries of the trust successfully sued to recover the residence for the trust.

The appellate court reversed. Settlor delivered the deed to Wife, a third party, with instructions to record it upon his death. There was no evidence that he reserved the right to recall the deed. The court held that the evidence conclusively established that Settlor intended to convey to the grantee corporation a future interest in the residence contingent on Settlor predeceasing Wife. Thus delivery of the deed, albeit to a third party, was effective as a matter of law. Settlor may not undo the transaction merely because he later had a change of heart.

Moral: Delivery of a deed to a third party to be delivered to the donee after the donor’s death is usually not a prudent estate planning tool because of the uncertainty and litigation it is likely to produce.