I am the settlor, trustee and beneficiary of my revocable living trust. My mortgaged townhome is an asset of the trust.

You have what lawyers call a cross over question; your question requires knowledge of California Trust law and debt collection. This question with slight variation has been asked a lot recently. It appears that there are commonly held but significant misunderstandings about Revocable Trusts, asset protection debt collection. What do you mean by “wrong trustee?” The “Trustee” under a deed of Trust is not the same “trustee” under the Revocable Trust that you created. In California a “Deed of Trust” is evidence of a secured note where the property in question is the security. The trustee under a deed of trust is not a true trustee and is not subject to the general rules governing trusts. The function of such a trustee is to reconvey the property to the trustor if the loan is repaid or to foreclose nonjudicially, at the beneficiary's election, if a default occurs. The beneficiary under a deed of trust is the lender. A revocable trust is only effective as an estate-planning tool for wealth transfer at death. A revocable trust does not protect assets from the settlor’s creditors. A person who creates a trust is known as the “Settlor.” Usually under a revocable trust the Settlor names himself/herself as the Trustee and Beneficiary while the settlor is alive, and then heirs are named as successor trustees. To be effective the trust must be “funded”, i.e. you must populate the trust with property. Real property is transferred into the trust by recording a Deed, sometimes confusingly called a Trustee’s Deed or Trust Transfer Deed. A deed of trust is completely different and not at all related to a Trustee’s Deed or Trust Transfer Deed. As to the trust, a trust is not an entity that can sue or be sued. A trustee has to bring an action under trust law. But you don’t have a trust issue you have a collection issue. I presume you made the loan and the deed of trust (mortgage) is in your name. You are the settler of the trust, under California law the property of a revocable trust is liable for creditors of the settler. It appears from your short statement of facts that your lender foreclosed on the mortgage townhome and recorded the transfer deed. The property is no longer your asset, either individually or as the trustee of your trust. If you relied upon the revocable trust to protect your property from foreclosure, you were badly misinformed. Why do you believe the wrong trustee sold the property? If you were given adequate notice of the default and adequate notice of the sale, you probably have no wrongful foreclosure claim. Often the lender will assign deed of trust to a sales trustee who is in the business of selling defaulted properties. Wrongful foreclosure is a treacherous area of the law and you need counsel experienced in Estate and Debt Collection law. Seek advice.

Attorney Webb has given you a good and comprehensive answer. I would simply add that you have not provided enough information in this summary or the other one you posted, in order to answer your questions. Was the trust originally the owner of the property or did you sign the mortgage and take title individually and then later transfer title to the trust? The answer to that question will likely determine if the trust is the correct party to sue or if you are. If you need to sue in the name of the trust, you would need to hire an attorney, in the State of Michigan. Your California mileage may vary. But in a complex situation like yours, with your house at stake, do you really want to take on the bank's lawyers and the foreclosure system on your own? I am not sure that is a wise decision. I will simply add that the trust may continue to hold some form of title in the property until any applicable redemption period expires. At that point, the house would belong to the lender and not you or the trust. James Frederick

As I noted previously, you need to retain the services of a California attorney and not risk losing your property through false economy. You may well want to sue both individually and as trustee of the trust, but only an attorney knowledgeable of the local court rules will be able to answer that question.

As to your standing to sue as Trustee: A trustee of a trust cannot represent the trust in court without being a licensed attorney. Richard A. Rodgers, Esq. SHANE, DiGIUSEPPE & RODGERS LLP 200 N. Westlake Blvd., Ste 201 Westlake Village, CA 91362 (805) 230-2525 [email protected] www.sdresq.com