If you own a property with one or more other co-owners and you hold the property as joint tenants then on your death it will pass to the surviving joint tenants regardless of what you state in your will. You may not want the other co-owners to receive your share on your death.
You may have inherited a property with your brothers and sisters as joint tenants but would prefer your share of the property to go to your spouse or children. That will only happen if you sever the joint tenancy with your brothers and sisters. It may be set out in a separation agreement or court order. Where, however, an agreement does not specifically address the severance of the joint tenancy, our courts often require that the parties establish severance by mutual course of conduct.
McKee v. National Trust 56 D. Many acts can cause the severance of the joint tenancy, sometimes unwittingly. For severance by conduct, however, there must be mutuality of intention to treat the ownership as a tenancy in common. Both joint tenants must openly and mutually treat the tenancy as a tenancy in common. For example, a declaration of irreconcilability under the Family Relations Act, RSBC, will sever any joint tenancy ownerships of property held by the couple.
Commonly the courts seem to focus on negotiations or actual agreements between the parties in respect of the property in question. These have been found to be evidence of an intention to treat the ownership interests as a tenancy in common. In Schofield V. Graham 6 D. Years later, when their marriage was dissolved, a dispute arose regarding the ownership of the property.
The wife commenced an action for a declaration that each owned an undivided one half interest as joint tenants. That action settled prior to trial on the basis that the property would be listed for sale, and the proceeds divided equally. Prior to final sale, however, the husband died and the wife claimed full ownership of the property as a surviving joint tenant.
The court held there was sufficient evidence to conclude that the parties intended to destroy their unity of possession. Therefore it ruled the joint tenancy had been severed. This decision was followed in Perry v. Perry Estate 39 E. Here a couple divorced but no court order was made with respect to the family home registered in their names as joint tenants. The home was sold, however the husband died before the sale proceeds were distributed.
Once again, the court ruled that the joint tenancy had been severed. The court found that the finalization of the divorce and the decision to sell the home indicated that the parties intended to terminate the unity of possession. Feinstein v. Ashford, BCSC is an example of the importance of careful analysis of various ownership interests. A few hours later he died.
A legal dispute thus arose as to whether this unregistered transfer was effective to sever the joint tenancy. The court held that, upon execution, the transfer was effective to sever the joint tenancy. A leading British Columbia case is Walker v. Dubard 45 E. Accordingly she both changed her will and transferred several assets out of joint tenancy. The husband made a claim under the Wills Variation Act and also sought declarations with respect to ownership of some of the joint assets.
These letters spoke of her intention to sever the joint tenancy in respect of some investment certificates and bonds. They did not however specifically direct the bank to transfer these assets.
If property is owned so the last survivor becomes the owner upon the death of the other owner s , the most carefully prepared will or estate plan cannot affect that right of ownership. Only the last survivor may dispose of the property by will.
A will can be changed or revoked at any time and as often as you wish, as long as you remain competent. A will does not become final until your death. Changes might be advisable in case of marriage, birth or death of a beneficiary, a change regarding your personal representative or the guardian of your children, or the purchase or sale of a business or other property. In the event of divorce, the will is automatically revoked as to the former spouse, unless the will expressly provides otherwise.
A decree of separation, which does not terminate the legal status of husband and wife, does not automatically revoke a will. In the case of an insolvent estate, where the assets are not sufficient to pay the debts and taxes which are due, jointly owned property which had been owned by the deceased may be used to pay these debts, taxes and expenses. How does a court determine what taxes are due? A tax determination is based upon the assets of the estate, certain exemptions which are available, the relationships between the deceased and the heirs and other factors.
Margaret contributes the full purchase price. When she dies, the CD is payable to Susan, but its value must be included in the estate for tax purposes. Tax laws are growing increasingly complex, and the various benefits and obligations which they entail, particularly for property held by husband and wife, cannot be covered in a general pamphlet It is important to know, however, that joint tenancy may not always be the most beneficial and economical way to own property, and that there may be estate planning devices which will better meet your needs both now and in the future.
Whether to continue to hold property presently owned in some form of survivorship, or to acquire additional property in that form of ownership, requires careful study based on your individual circumstances. Changes in tax laws, property laws and property values, as well as many other factors, affect such decisions. Joint tenancy and other survivorship interests involve serious consequences.
You and your lawyer should review any existing survivorship arrangements regularly, and consider carefully any such future arrangements.
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