Real Property, Restraint on Alienation, Testamentary Trust Restriction On Resale, 1, 11
Civ. Code 711 voids “conditions restraining alienation, when repugnant to the interest created.” This decision holds that section 711 applies to restrictions a testamentary trust imposes on resale of property to be conveyed to a beneficiary under the trust. Here, in an attempt to keep the family home in the family, the trust provided that the three children to each of whom a third interest in the home was to be transferred could not resell that interest except to other sibling(s) and only at a $100,000 price. That restraint on resale of the co-tenancy interest was unreasonable; it would cause a selling sibling to lose hundreds of thousands of dollars as the sale price restriction was well below market value. the trustor might have achieved the same result by establishing a different trust to hold title to the house, but she didn’t choose that route, and the trust amendment that she signed instead didn’t establish such a trust, it just imposed the unenforceable restraint on alienation.