{"id":961,"date":"2016-05-26T10:32:07","date_gmt":"2016-05-26T17:32:07","guid":{"rendered":"http:\/\/fiduciarydutiesblog.com\/?p=961"},"modified":"2016-05-26T10:32:07","modified_gmt":"2016-05-26T17:32:07","slug":"greenspan-v-ladt-llc-once-and-for-all-a-trust-is-not-an-entity","status":"publish","type":"post","link":"https:\/\/fresnolawyerblog.com\/?p=961","title":{"rendered":"Greenspan v. LADT LLC – Once and for All, a Trust Is Not an Entity"},"content":{"rendered":"

Sometimes a court provides a clear statement of the law.\u00a0 Greenspan v. LADT LLC<\/strong> (2010) 191 Cal.App.4th 486 is one such opinion, providing a definite and authoritative answer to the issue of whether a trust is an entity \u2013 it is not.<\/p>\n

From the opinion.<\/p>\n

\u201cCourts often speak of the alter ego doctrine as if it applied to a trust as an entity.\u00a0 But a distinction must be made between a trust and a trustee.\u00a0 The general rule that a trust is a relationship is universally recognized by U.S. cases and statutes, and is consistent with the prevailing norms of the entire common-law world.\u00a0 The fundamental nature of this relationship is that one person holds legal title for the benefit of another person.<\/p>\n

\u201cThus, in actuality, a trust is not a legal person which can own property or enter into contracts.\u00a0 It is the trustee or trustees who hold title to the assets that make up the trust estate \u2026 Because a trust is not a legal entity, it cannot sue or be sued, but rather legal proceedings are properly directed at the trustee \u2026<\/p>\n

\u201cAs recognized in California: Unlike a corporation, a trust is not a legal entity.\u00a0 Legal title to property owned by a trust is held by the trustee.\u00a0 A trust is simply a collection of assets and liabilities.\u00a0 As such, it has no capacity to sue or be sued, or to defend an action \u2026<\/p>\n

\"Fresno<\/a><\/p>\n

\u201cBecause a trust is not an entity, it’s impossible for a trust to be anybody’s alter ego.\u00a0 That’s because alter ego theory, which is simply one of the grounds to \u2018pierce the corporate veil,\u2019 is inescapably linked to the notion that one person or entity exercises undue control over another person or entity.\u00a0 However, a trust’s status as a non-entity logically precludes a trust from being an alter ego.<\/p>\n

\u201cBut while applying alter ego doctrine to trusts is conceptually unsound, applying the doctrine to trustees is a different proposition.\u00a0 Trustees are real persons, either natural or artificial, and, as a conceptual matter, it’s entirely reasonable to ask whether a trustee is the alter ego of a defendant who made a transfer into the trust.\u00a0 Alter-ego doctrine can therefore provide a viable legal theory for creditors vis-\u00e0-vis trustees.<\/p>\n

\u201cThus, in the present case, Greenspan properly sought to add Moti Shai, the trustee of the Shy Trust, as a judgment debtor.\u00a0 If Moti Shai is the alter ego of Barry Shy, then Barry may be considered the owner of the Shy Trust’s assets for purposes of satisfying the judgment.\u00a0 The trial court erred in concluding that the alter ego doctrine could not be used to reach the assets of a trust.\u201d<\/p>\n

That\u2019s a breath of fresh air, hopefully forever ending any argument that a trust is an entity.\u00a0 Greenspan v. LADT LLC<\/strong> (2010) 191 Cal.App.4th 486<\/p>\n","protected":false},"excerpt":{"rendered":"

Sometimes a court provides a clear statement of the law.\u00a0 Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486 is one such opinion, providing a definite and authoritative answer to the issue of whether a trust is an entity \u2013 it is not. From the opinion. \u201cCourts often speak of the alter ego doctrine as if […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,9],"tags":[],"class_list":["post-961","post","type-post","status-publish","format-standard","hentry","category-case-law","category-trusts-and-estates"],"_links":{"self":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/961"}],"collection":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=961"}],"version-history":[{"count":0,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/961\/revisions"}],"wp:attachment":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}