In particular, in dealing with bank accounts held in joint names, a joint account holder should be cautious in withdrawing funds unilaterally to be used for his/her own benefit. If you wish to “gift” a portion of your property to your adult child(ren) outside of your will so it does not make up part of your estate, there is an important presumption that exists in law that you should be aware of. beneficial interest means having the “real” or ‘true” ownership – for example, you may have a beneficial interest because you paid for the property; and. The Courts have long recognized that joint tenancy can be severed through a “course of dealing” which indicates the parties’ … If you do wish to transfer ownership in real estate (land, house, strata) you should see a lawyer or notary. It is beyond the scope of this article to explain all the legal complexities and individual circumstances that arise in this area of law. In British Columbia, however, s. 18 (3) of the Property Law Act, R.S.B.C. This means that each person is a 100% lifetime owner of the entire property. This could be done by simply sending the Notice of Severance to the other party in the post and asking that they sign and date the notice themselves and return it. First, a joint tenant may act unilaterally upon his or her share so as to destroy the four unities. In practical terms, the chief distinction between joint tenancy and tenancy in common is the right of survivorship. Joint tenancy with rights of survivorship (JTWROS) is a type of account that is owned by at least two people. For example, if there are two owners (yourself, and, say, an adult child), each person owns ½ of the property; if there are three owners, each owns ⅓ of the property; and so on. A recent decision of the British Columbia Court of Appeal gives a good reminder that a joint tenant may, through his or her unilateral actions, unintentionally sever a joint tenancy, thereby converting ownership into a tenancy in common and extinguishing the right of survivorship. The most secure digital platform to get legally binding, electronically signed documents in just a few seconds. The title company will help construct a deed stating the owners are reverting “interest in the property” to themselves. A Notice of Severance, signed and dated by the party who wishes to sever, will need to be served upon the co-owner. The ‘deed of gift,’ even though it is called a ‘deed,’ does not have anything to do with legally transferring real estate or ownership in a joint account. This information is not meant as legal opinion or advice. Further, the court found than when Janes withdrew the funds and transferred the proceeds to herself and her husband, she destroyed the unity of title in the joint ownership and hence converted the interest into a tenancy in common. Therefore, documentation of your intentions requires careful drafting and assistance from a property or estate lawyer or a notary to ensure that what you want is properly documented. This person(s) may be an adult child or children, a close friend or an acquaintance. A joint tenancy may be severed at the option of either joint tenant, or by mutual agreement. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. SITUATION 2: You may think you have transferred ownership of part of your property to a relative to avoid probate, but they discover after your death that you only transferred the “legal title” and not the “beneficial interest” in the property. If you transfer the ownership as a “joint tenancy,” it means that the property is owned by you and whomever you transfer ownership to in equal proportions. If you own a property as a joint tenant: 1. each joint tenant has an equal, indivisible, share in the property; 2. you need the consent of the other joint tenant(s) in order to sell your share in the property; and 3. if one of you dies, that person’s share in the property automatically passes to the surviving joint tenant(s), regardless of the provisions of their will (this is known as the right of survivorship). COVID-19 Notice. This is critical because, upon your death, this documentation may become the primary source of information used to determine how you intended the property to be transferred. Changing from Tenants in Common to Joint Tenants. This means that if you indicate in your willthat you would like your share in the property to pass to someone other than the surv… This is significant because you may have wanted to enter into a joint tenancy to effect a transfer of the whole title of the property to the other owner after you die, but without the proper supporting documents as evidence of your intentions, this may not, in law, have taken place. Joint!tenancy!is!one!of!the!two!forms!of!coGownershipinexistencetoday. You should apply for a ‘ Form A restriction ’. In arriving at its decision, the BC Court of Appeal provided an excellent summary of the law relating to joint tenancy and how a joint tenancy may be severed. And third, the joint tenants may, in the course of their dealings, intimate that their interests constituted a tenancy … In this case, Dorothy Burnett owned a property (the “Knox Road Property”) jointly with her daughter, Diana Janes. It is also important to be aware of this presumption if you discover, after the death of a loved one, that their property was “gifted” to adult children. INTRODUCTORY’NOTE’!! You may be asked to share ownership of your property (house, car, bank account, etc. if you are transferring to an adult child, make sure your intentions are properly recorded at the time of transfer. Also, if you die before the other joint tenant(s), your interest (ownership) in the property will, in most cases, automatically transfer (called the “right of survivorship”) to the other joint tenant(s). Become a member, Donate or Volunteer to help prevent Elder Abuse in BC, MEDIA/VOLUNTEER/OUTREACH INQUIRIES: outreach@seniorsfirstbc.ca, GENERAL INQUIRIES: info@seniorsfirstbc.ca, Find resources and contacts in your area for Elder Abuse issues and concerns, The Federal Governments Online Tool to help find programs for Seniors in need, Copyright © 2020 Seniors First BC. SITUATION 1: You may have thought you entered into a joint tenancy, but you discover that it was never created in the first place, or it has been “severed” without your knowledge. As a consequence of the severance of the joint tenancy, the court decided that half of the sale proceeds from the Knox Road Property flowed to the estate of Mrs. Burnett. It simply helps clarify what your intention is. The adult children will need to point to some evidence of the deceased parent’s intention to gift the beneficial interest to them in order to uphold the transfer. Available for PC, iOS and Android. Second, joint tenants may agree to sever by mutual agreement. If the portions of the interests owned are not specified on the land title certificate, it is assumed in law that the shares are equal as between the owners (for example, if 2 owners, both would have a ½ interest; if 3 owners, each would have a ⅓ interest). Second, joint tenants may agree to sever by mutual agreement. Her unilateral act severed the joint tenancy and thus extinguished the right of survivorship. Janes held a power of attorney for her mother and, in 2010, she sold the Knox Road Property for $2.7 million. cars, bank accounts, etc), the ownership is a joint tenancy; and. Therefore, as a general rule, if you are being asked to share ownership of your property with another person: The above BC Centre for Elder Advocacy and Support public legal education article was written in 2009. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi. Unity of time means that all the interests are vested concurrently. If you want to add someone to a joint account, you should speak to your bank or credit union. On death, each owner’s respective interest falls to his or her estate. Of note, the remaining owner does not need to be notified of the change in tenancy from joint tenancy to tenancy in common as it can be done by one owner. Older adults in BC can live with dignity safe from abuse of any kind. Joint tenancy is a common form of ownership for family holdings and is often used for estate planning purposes. This approach was confirmed by the Supreme Court of Canada in the case of Pecore v. Pecore where the court made a decision that this presumption applies in the case of property transfers as between parents and their adult children. On the other hand, if you transfer the ownership in your house as a “tenancy-in-common,” each owner holds a separate and distinct interest in the property, not necessarily in equal shares (for example, two owners might have shares of ⅓ and ⅔, or ¼ and ¾). Let’s say you are the sole owner of property, such as your house, and you are considering adding another person(s) as an owner. Each co-owner has the right to use and enjoy the property. Most often this occurs during a marriage breakup. Unity of title means that the title of each joint tenant arose from the same instrument. In order to protect the health and well-being of our employees and customers, the Land Title and Survey Authority of British Columbia (LTSA) is restricting access in all Land Title Offices to only its employees, direct access pass holders and Registry Agents until further notice. It may sometimes seem easier, more convenient, or simply a matter of estate planning to transfer all or part ownership of your property to another person(s), however, it is important to understand any and all legal implications before making such decisions. Joint tenants are treated as a single owner for legal purposes. However, that is not the only way that joint tenancy can be severed. If two people own property as tenants in common and one dies, the deceased person’s interest in the propert… Start a … You may do this by conveying your joint tenancy interest to any third person. Tenants in common, on the other hand, may have different proportions or shares of the property as well as different durations of interest. In other words, your interest will not “pass” with your estate and, therefore, you will not be able to give the property to other children or other beneficiaries through your will. Upon termination, a tenancy in common is formed … Unity of Possession means that each of the co-owners has an equal right to possession of the entire property. It is important to be aware of this presumption if you want to gift your property before your death to your adult children. It contains general information only and is not a substitute for getting legal advice about your particular situation. If they fail to do this, it will be presumed that the adult child became an owner solely to assist with the management of their parent’s financial affairs. In order to terminate a joint tenancy, one of the four unities must be destroyed. BECOME A VOLUNTEER Your intentions should be clearly documented, as discussed above. Severing the Joint Tenancy is a relatively straight forward task. Fill out, securely sign, print or email your joint tenancy form instantly with SignNow. That is, you can give your share of the property to someone in your will, or if you die without a will, it will “pass” to the closest relative according to BC laws of intestacy (which means dying without a will) even if the person inheriting the share of property was not formerly one of the tenants-in-common. A few months later, Mrs. Burnett died. But strangely enough, the partition process begins with the following question: Can we literally divide up the property between its owners? Create a new document called a deed transfer. The main point, however, is to generally recognize the benefits and burdens of each type of co-ownership and understand that the ownership relationship may be terminated for any number of reasons. Co-owners of property can either be “joint tenants” or “tenants in common.” Joint tenants have identical proportions and durations of interest in a piece of property, along with identical rights of possession. We do not warrant its accuracy. If the joint tenancy is severed, both parties will thereafter hold their interests in the land as tenants in common each holding what is called an ‘undivided 50% interest in the land’ and the survivor of the two owners of the land will not automatically receive the other’s interest when that person dies. Joint tenancy gives each person on title an undivided interest in the entire property. There are several ways to sever a joint tenancy. Are they joint tenants, or tenants in common? It is often prudent to enter into agreements to clearly confirm what your intentions are about the nature of the transfer. If only the legal, and not the beneficial, interest is transferred, then the surviving owner likely holds the asset in trust for the estate of the deceased person.. All Rights Reserved. The most a parent can do in this type of situation is to unilaterally ‘sever’ the joint tenancy. Zeligs died one year after her mother and Zeligs’ husband, as executor of Zeligs’ estate, commenced an action against Janes claiming, among other things, that the joint tenancy on the Knox Road Property had been severed when the property was sold. 2. Tenants in Common can own different proportions of the property, for example ¼ and ¾, and they can sell … On this appeal, Janes argued that a joint tenant holding a joint bank account has the right to withdraw funds from the account and, when he/she does, the funds become the exclusive property of the withdrawer unless the funds are held on a resulting trust (which, on the facts of this case, the lower court found not to exist). This publication is provided as an information service and may include items reported from other sources. © Miller Thomson LLP 2020. You can complete our online membership application. Considering prior case law, the court maintained that a joint tenancy may be severed and converted into a tenancy in common in three ways. A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. For a joint tenancy to exist, the court affirmed that “four unities” must exist: unity of title, unity of interest, unity of time and unity of possession. Reporton’Joint’Tenancy’’! As a point of reference, the alternative to joint tenancy is tenancy … If the ownership or title document says nothing about the nature of the ownership, as a general rule BC law assumes that: There are a number of legal complexities that might arise in relation to shared property. 1. The owner seeking severance must serve the opposing co-owners stating the intention to sever joint tenancy. If possible, Courts prefer to literally divide the property in equal pieces and give each joint owner a piece. This typically occurs when all of the joint tenants enter into an agreement which expressly purports to sever the joint tenancy. The County Assessor felt this triggered the reassessment provisions, the assessed value of the house went up, and the property tax increased an additional $2,683 per year. 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