Joint Titles at Death Flashcards
Comparing Joint Tenancy and Community Property at Death
Spouse Dies Intestate:
Community Property – surviving spouse gets all of the CP
Joint Tenancy – surviving spouse gets all of the JT through right of survivorship
Spouse Dies with a Will:
Community Property – surviving spouse may only get one half of CP (their half); decedent has a right to will away their half of the CP
Joint Tenancy – surviving spouse gets all of the JT through right of survivorship
General Presumption for Joint Tenancy at Death
At death, the presumption follows the title
Joint tenancy is presumed to be a joint tenancy, CP is presumed to be CP
Presumption can be rebutted by an agreement between parties that the property was CP or SP, rather than joint tenancy
- Must be agreement between parties, statement in one spouse’s will doesn’t work
Pre 1985 – agreement may be written, oral, or implied
1985 and later – agreement must be in writing
*Compare to General Presumption at Divorce – JT property presumed to be CP
If Spouse Dies After Divorce is Granted but Before Property Issues are Determined
This is treated as a divorce case, Joint Tenancies presumed to be CP
Presumption is rebuttable by:
a. Written agreement between spouses
b. Writing in deed or title
Marriage of Hilke
Couple buy a house as joint tenancy in 1969, file for divorce after 1984 legislation. Marriage dissolved, then W dies, property settlement not final. H claimed they had oral agreement re right of survivorship in the JT
Holding: divorce was final before death, so the marriage was ended by divorce, so the joint tenancy presumptions that come with divorce apply (JT presumed to be CP). The right of survivorship (feature of JT) is contingent until someone dies, it is not a vested right at divorce. Therefore, it’s ok to retroactively apply 1984 statute requiring agreements to be in writing. Oral agreement doesn’t fly
Probate Code 5601 (after 2001)
Divorce automatically severs JT and destroys the right to survivorship
Divorce converts JT into a Tenancy in Common, each spouse has right to will away their share
If Spouse Dies After Petition for Dissolution Filed but Before Divorce is Granted
This is treated as a death case
1. Joint Tenancies presumed to be Joint Tenancy
- Joint Tenancies presumed to be CP
- Presumption is rebuttable by:
a. Written agreement between spouses
b. Writing in deed or title - Filing for divorce does not sever the Joint Tenancy, the actual granting of divorce does that
Estate of Blair
Couple buy home as joint tenancy, later separate, not yet officially divorced. W drafts new will leaving her estate to her sister. Before divorce is final, W dies.
Holding: Divorce had not yet occurred, the marriage is ended by death, so JT is presumed JT, so the right of survivorship is still valid. H gets the property in full. W cant will away her share of the property
Community Property with Right of Survivorship
New type of title as of July 1, 2001
Divorce – property is presumed to be CP (each spouse would get ½)
Death – property is presumed to be Joint Tenancy and surviving spouse has right of survivorship (gets 100%)
Benefits of CP with Right of Survivorship
- The Right of Survivorship itself
- Favorable Tax Treatment – when you acquire property under right of survivorship, it is not treated as a gain, while under a joint tenancy you will be taxed on a gain of the other 50% of the property
CP Right of Survivorship – entire basis of property is fair market value at death
a. Ex: $100k home, now worth $1M, H dies, W gets full ownership and sells
i. Property stepped up to $1M, when she sells for $1M she has zero taxable gain
Joint Tenancy – half the property gets stepped up basis to fair market value at death
a. Ex: $100k home, now worth $1M, H dies, W gets full ownership and sells
i. H’s half stepped up to $500k, W’s half stays at $50k (that she already had), when she sells for $1M she has $450 k taxable gain
e. If determined to be all CP, follow normal rules for jointly titled property at divorce
