This is an unpublished opinion of the North Carolina Court of Appeals and as such, does not constitute controlling legal authority. The Court of Appeals notes that citation of unpublished decisions is not favored, but may be permitted in under the North Carolina Rules of Appellate Procedure. The case may be considered significant in that it appears that it is the first time that a North Carolina appellate opinion has spoken on the issue of whether a deed naming a trust as grantee is valid in North Carolina.

The defendants in this case contended that the deed at issue was rendered invalid because it was named the trust as grantee rather than naming the trustee of the trust. The defendants only cited cases from other jurisdictions. The Court of Appeals noted that those cases are not binding on it and concluded that they were irrelevant given clear North Carolina statutory language to the contrary.

Defendants are correct that in North Carolina "the creation of a trust must involve a conveyance of property and before property can be said to be held in trust by the trustee, the trustee must have legal title." In re Estate of Washburn, 158 N.C. App. 457, 462, 581 S.E.2d 148, 151 (2003). However, North Carolina law also provides that a deed that conveys property to a trust is also "deemed to be a transfer to the trustee or trustees of that trust." N.C. Gen. Stat. § 39-6.7(a) (2023). Therefore, the deed at issue in this case, which conveyed real property to the trust, also transferred the property to the trustees. Accordingly, the deed is valid.

On the issue of standing, the defendants also argued that the trust lacked standing because a trust cannot sue or be sued. The opinion states:

Our Supreme Court has held that "legal entities other than natural persons may have standing." Willowmere Cmty. Ass'n, Inc. v. City of Charlotte, 370 N.C. 553, 557, 809 S.E.2d 558, 561, (2018) (internal marks and citations omitted). Previously, our Court has recognized that a trust is a legal entity capable of suing and being sued. See Goodwin, by and through Hales v. Four Cnty. Elec. Tr., Inc., 251 N.C. App. 69, 74, 795 S.E.2d 590, 594 (2016) ("[T]he Membership Co-Op and the Non-Profit Trust are two separate, distinct legal entities.").

The defendants cited several cases from other jurisdictions holding that a trust is not capable of suing or being sued and cannot have standing. The Court of Appeals deemed the cases to be irrelevant because they "directly conflict with our established law..." and as "...we have previously held, a trust is a legal entity that can be party to a legal action in North Carolina. Accordingly, we hold that Plaintiff has standing." The problem with this conclusion is that the issue of whether the Trust in Goodwin was an entity with standing was neither litigated in the case nor essential to its outcome and therefor the statement should be considered as dictum. As the opinion is unpublished, hopefully, it will not be cited for this proposition.

Interestingly enough, trusts are by definition "relationships" and, other than business trusts, not considered to be entities capable of taking title. N.C.G.S. Section 39-6.7(a) was adopted to create a rule of construction that would render deeds to and from "trusts" valid and avoid the issue of whether they were entities capable of taking title. This opinion gets this aspect correct where it states: "Therefore, the deed at issue in this case, which conveyed real property to the trust, also transferred the property to the trustees."