Georgia Supreme Court Requires Deed Delivery to Pass Title

In a recent decision of the Georgia Supreme Court issued on November 8, 2010, the Court held that a person who wishes to convey title to a property must physically deliver the deed. Smith v. Lockridge, Case Nos. S10A1007 and S10A1009 (Nov. 8, 2010). This case is relevant to estate planning. If a grandparent or parent makes out a deed to a grandson or granddaughter or other relative, the deed must be delivered before death in order to pass title under the deed. The consequences of not delivering the deed as intended could completely change the persons who take title from the estate since if the deed is not delivered, title will pass under a last will and testament, or if none was executed, through the laws of Georgia. It is not uncommon for a person to make out a deed and hold it to ensure that the recipient reaches a proper age or maturity level, or takes care of the person.

In a well written opinion by Justice Nahmias, the Court laid out the rules for deed delivery in text book fashion:

'It is indispensable to the delivery of a deed that it pass beyond the control or dominion of the grantor; and where a grantor retains a deed which he executes in his possession and control until his death without doing anything to indicate an intention to deliver it, it is void for want of a delivery.’ “ Id. (quoting Childs v. Mitchell, 204 Ga. 542, 544 (50 S.E.2d 216) (1948)). Even where the grantor stands in a relationship of trust with the grantee, the grantor's intent to deprive himself of power and control over the deed must be shown. See Stinson v. Woodland Bank, 154 Ga. 254, 257 (114 SE 181) (1922). The true test of delivery is “ ‘whether or not the grantor intended to reserve to himself the locus penitentiae,’ “ which means “ ‘an opportunity for changing one's mind,’ “ “ ‘an opportunity to undo what one has done,’ “ or “ ‘a right to withdraw from an incomplete[ ] transaction.’ “ Morris v. Johnson, 219 Ga. 81, 89 (132 S.E.2d 45) (1963) (citations omitted).

Thus, our cases hold that where a parent executes a deed in favor of a minor child and shows the deed to the child, there is no delivery if the parent does not record the deed, retains the deed in his possession and control, and retains possession of the land included in the deed. See Morris, 219 Ga. at 90-91;Stinson, 154 Ga. at 256-257. Similarly, simply handing a deed to a potential grantee for review and then taking it back does not constitute delivery. See Keesee v. Collum, 208 Ga. 382, 386 (67 S.E.2d 120) (1951). A grantor's mere statements that the property already belongs to the potential grantees who are named in an undelivered, unrecorded deed is insufficient to show delivery if the grantor keeps the deeds in his possession and takes no action to have them delivered. See Giuffrida v. Knight, 210 Ga. 128, 130-131 (78 S.E.2d 29) (1953).

Smith v. Lockridge, supra.