The Oklahoma Bar Journal January 2023

breach of the fiduciary duty? If so, may a title examiner rely on the presumption afforded by OTES §15.1 and the corresponding stat utes and pass title without objec tion? Does any of this analysis change under the SLTA after the conveyance has been of record for 10 years? Until a clarifying statute or decision is reached and pub lished, each title examiner should determine their own comfort level with passing title.

weren’t required; 2) documentary stamps are not conclusive evidence of the total consideration paid for the property; 3) documentary stamps do not, in and of themselves, indicate that fair market value was received for the property; and 4) exchange for fair market value may not validate the conveyance. As a practical matter, if this examiner prepares a deed for distribution purposes, they will include a recital stating the deed is made pursuant to the distribution terms of the trust. 5. The Oklahoma Title Examination Standards Handbook can be found as an appendix to Title 16 at www.oscn.net, www.eppersonlaw.com, or you may obtain a hard copy from the OBA. 6. An electronic copy of the Model Title Standards can be found at www.eppersonlaw.com. 7. Oklahoma Title Examination Standard §29.2(D)(4). 8. 1949 OK 37, 205 P.2d 858, 201 Okla. 318. 9. Id. , at ¶3-8. 10. Id. , at ¶9-13. 11. Id. , at ¶25. 12. Id. , at ¶22, quoting Barnes et al v. Lynch et al , 9 Okla. 156, 59 P. 995, at ¶6. 13. Id. , at ¶23, quoting Hoyt v. Latham , 143 U.S. 553, 12 S.Ct. 568. 14. Id. , at ¶24, quoting Marsh v. Whitmore , 21 Wall. 178, 88 U.S. 178, 22 L.Ed. 482. 15. Court of Appeals of Arkansas, Division III, 2019 Ark. App. 171, 574 S.W.3d 159 (March 13, 2019). 16. Arkansas Standard §4.7(1)(c) refers to Arkansas Standard §4.16 “Certificates of Trust.” Standard §4.16(4) includes powers of the trustee as one of the recitations to be included in a certificate of trust. 17. Howe v. Links Club Condominium Asso., Inc. , 263 N.C.App. 130 (2018). The North Carolina Uniform Trust Code also illustrates that a trustee’s sale of trust property is “rebuttably presumed to be affected by a conflict of interest if the trustee enters into the transaction with[,]” inter alia , an “officer, director, member, manager, or partner of the trustee, or an entity that controls, is controlled by, or is under common control with the trustee;” or “[a]ny other person or entity in which the trustee, or a person that owns a significant interest in the trust, has an interest or relationship that might affect the trustee’s best judgment.” N.C. Gen. Stat. §36C-8-802(c)(3)&(4) (2017). 18. THZ Holdings, LLC v. McCrea , 231 N.C.App 482 (2013) discussing N.C.G.S.A. §36C-8-802(b): Subject to the rights of persons dealing with or assisting the trustee as provided in G.S. 36C-10-1012, a sale, encumbrance, or other transaction involving the investment or management of trust property entered into by the trustee for the trustee’s own personal account, or that is otherwise affected by a conflict between the trustee’s fiduciary and personal interests, is voidable by a beneficiary affected by the transaction, without regard to whether the transaction is fair to the beneficiary, unless: (1) The terms of the trust authorized the transaction; (2) The court approved the transaction; (3) The beneficiary did not commence a judicial proceeding within the time allowed by G.S. 36C-10-1005; (4) The beneficiary consented to the trustee’s conduct, ratified the transaction, or released the trustee in compliance with G.S. 36C-10-1009; or (5) The transaction involves a contract entered into, or claim acquired

by, the trustee before the person became or contemplated becoming trustee. 19. Stegemeier v. Magness , Supreme Court of Delaware, 728 A.2d 557 (1999) holding that a person acting in a fiduciary capacity cannot also act for themselves and cannot be a purchaser from the estate for which they are trustee, however fair the terms of the sale or however honest the circumstances. 20. Huff v. Huff , Court of Appeals of Indiana, 892 N.E. 2d 1241 (2008) referencing IC 1985, 30-4-3-5. 21. This author has been unable to locate a copy of North Carolina, Indiana or Delaware title standards if such standards exist.

ABOUT THE AUTHOR

Rhonda J. McLean is an attorney at Munson & McMillin PC in Edmond. She practices in the areas of real property

title and curative (both surface and oil and gas), probates and estate planning. She currently serves as secretary of the Title Examination Standards Committee and chairperson-elect of the Real Property Section of the OBA. She has previously served as editor of the Title Examination Standards Handbook and as president of the Oklahoma City Real Property Lawyers Association. 1. This article is written strictly from a title examination standpoint and whether a title examiner should pass title or make a requirement for review of the trust document or other curative measures. This article does not address remedies beneficiaries may have against a trustee beyond avoidance of the conveyance. 2. A marketable title is one free from apparent defects, grave doubts and litigious uncertainty and consists of both legal and equitable title fairly deducible of record. Oklahoma Title Examination Standard §1.1. 3. On occasion, a trust agreement will be filed of record. However, that is the exception rather than the rule. And even when filed of record, the examining attorney cannot know with any certainty whether the trust agreement has been amended since recording. 4. When bringing up this point in various groups, the answer is often, “Look at the documentary stamps.” This isn’t conclusive for a few reasons: 1) the author is aware of instances when a clerk recording the document told the individual that if it had the same names for the grantor and grantee, documentary stamps ENDNOTES

22 | JANUARY 2023

THE OKLAHOMA BAR JOURNAL