In re Estate of Washburn

In October 2000, Vera Yarborough Washburn died. Before her death, Washburn signed an irrevocable trust agreement that was accompanied by a document listing the assets that should be assigned to the trust upon her death. The document indicated that all Washburn’s common stock should be placed in the trust. When Washburn died, she held 27,016 shares in Branch Banking and Trust (BB&T), which were represented by two certificates. Certificate number BBT080224 (certificate A) was for 13,508 shares, and certificate number BBT093753 (certificate B) was for 13,508 shares. Before her death, Washburn indorsed certificate A by signing it, and she delivered it to the assigned trustees (plaintiffs). However, at the time of her death, Washburn had not indorsed or delivered certificate B to the trustees. A trial court ruled that the 13,508 shares represented by certificate A belonged to the irrevocable trust and the 13,508 shares represented by certificate B belonged to Washburn’s estate (defendant). The trustees felt the trial court erred in not giving the trust both certificates because even though certificate B was not signed or delivered, the assignment-of-assets document that accompanied the irrevocable trust agreement clearly indicated that all stock was to go to the trust. On the other hand, Washburn’s estate felt that both certificates should go to the estate because even though certificate A was signed and delivered to the trust, the transfer was incomplete because Washburn had not registered the transfer in the corporate books. Both parties appealed the trial court’s decision.