2011 Cal. App. Lexis 88 (January 26, 2011)

On June 29, 2009, at the age of 84, Mona Berkowitz created a revocable trust and executed a writing purporting to assign all of her real and personal property to herself as trustee of her trust. She also executed a pour-over will leaving any probate estate to the trust. On October 29, 2009, she amended and restated her trust, and assigned all of her shares of stock in 11 corporations and funds to the trust. The amendment and restatement named her daughter and niece as successor trustees on Mona’s death.

Mona died in November of 2009, and in February of 2010 the trustees filed a petition with the probate court to confirm that 3,017 shares of stock in Medco Health solutions, Inc. were assets of the trust. Medco was not mentioned in the assignment of stock signed by Mona in October 2009. The trial court held that Mona’s general assignment of personal property to the trust was ineffective to transfer the Medco shares.

On appeal, the California Court of Appeals reversed the trial court on the basis that there was no California authority prohibiting a transfer of stock to a trust by a general assignment of personal property. Focusing on implementing Mona’s intent, the court found that the general assignment and the pour-over will showed that Mona intended to transfer all of her personal property to the trust and that omission of the Medco shares in the subsequent assignment was an oversight because of misplaced stock certificates. The court noted that the general assignment would not have been effective to transfer real property to the trust under the statute of frauds, but in the case of shares of stock, the statute of frauds did not apply and therefore the general assignment was sufficient.