77-8
77-8
December 12, 1977
Re: Opinion — Financial Code Sections 106 and 1503
Dear Mr. ________ :
This is in reference to your letters of September 1, 1977 and November 1, 1977.
Your question was whether a Utah corporate non-bank trust company could hold title to California real estate in a capacity of a trustee and engage in related activities such as managing of the property and possibly defending and maintaining litigation relative to the property until such time as the property is sold. We understand that an answer to this question is necessary under Utah Law in order to determine if a California corporate trustee could conduct similar business in Utah.
Conducting a “trust business” means engaging in the activities specified in Financial Code Section 106 for profit and on a regular, continuous or systematic basis in the state. Such activity would require a trust license.
Our opinion is that as long as the activities described in paragraph 2 are to be conducted on a one-time-basis only in California by a Utah non-bank trust company (which we understand to mean the equivalent of the trust department of a title insurance company in California or an independent trust company) and not on a regular, continuous or systematic basis in the state, no trust license is required.
Please contact us should you have further questions regarding this matter and thank you for your patience and courtesy.
Very truly yours,
CARL J. SCHMITT
Superintendent of Banks
By
DIANA H. NISHIURA
Counsel
DHN:ma
cc: State Banking Department, S.F.
November 1, 1977
Re: Utah Non-Bank Trust Company’s Right to Act in California
Dear Miss Nishiura:
Title Insurance and Trust Company, a non-bank trust company licensed to conduct a trust business in California, wishes to hold title to Utah realty in joint tenancy with my client, so that upon my client’s death title would pass to the trust company without the necessity of a Utah ancillary probate of my client’s estate. The trust company intends to sell the property but would have to hold it for a period of time, and in connection with it manage it and possibly improve it. While no litigation is actually foreseeable, it is possible that any owner of the property might have to defend or maintain litigation arising out of ownership of the property. The trustee does not contemplate continuous activity in Utah.
The right of the trustee to act in Utah depends upon whether a similar corporate fiduciary in Utah could carry on such activities in California without qualifying in California.
Therefore, it is necessary for my client to know whether a Utah corporate non-bank trustee could so act with respect to a parcel of California realty under the same circumstances, bearing in mind that the primary purpose would be to avoid an ancillary probate.
A prompt reply would be greatly appreciated.
Very truly yours,