Exceptions to joint right of survivorship
- Still subject to federal estate taxation (unless spouse)
2. States can tax fractional share owned by decedent joint
Joint tennacy has rit of survivorship, meaning…
When 1 joint dies, the prop. Is free from his concurrent intrests; survivor retains undivided right in the prop.
Joint Tennecy requirea 4 unitites
- Unity of time ( intrests vested at same time)
- Unity of title (intrests aquired by same instrument)
- Unity of intrest ( intrests of same type and duration)
- Unity of possession (1/2 &1/2 share, 1/3, 1/3, &1/3)
If one of the unities is destroyed - prop becomes a ______.
Tennacy in common
Joint tennacy: implied or express lang. Required?
Express lang. Requires. Must be clear intent to create this estate.
“To A and B as joint tennants with right of survivorship”
Tennacy in common: presumed or express lang required?
Presumed; joint tennacys are generally disfavores.
Severence of a joint tennacy
Can be terminated by a suit of partition
Tenancy in Common (non-marital)
Features
Features
- No right to survivorship.
- Upon death, right descends to heirs, not to co-tenants.
- Can be accessed by creditors.
Tenancy in Common (non-marital)
Creation
- Can be created expressly in a grant or will or by operation of law.
- Can be created through operation of law if several people inherit a particular piece of property.
Tenancy in Common (non-marital)
Termination
Death of a co-tenant does not terminate a TIC.
Tenancy passes to heirs or devisees, who become tenants-in-common with the surviving co-tenants.
Only by partition
Tennacy in common or joint tennacy presumed?
- Presumption - court assumes TIC unless devise specifically states otherwise.
- Can also occur if a grant to two or more persons does not create a valid joint tenancy OR if it is ambiguous as to the type of concurrent interest intended.
Partitioning a TIC
Partition can be:
“In kind”- land is physically divided;
“By sale”- property is sold and proceeds are divided;
“By appraisal”- one co-tenant buys out the others at appraisal price.
Courts can order compensatory adjustment to take into account inequalities in expenses incurred or benefits derived from the property
Joint Tenancy (non-marital) Features
1.Right to Survivorship
2.Upon death, passes to joint tenant, not to heirs even if specifically directed in will.
—Avoids probate (“poor man’s will”)
—Has made JT must more popular in the last century.
3.Cannot be accessed by creditors after interest has passed to co-tenant.
Ex. People v. Nogarr (p.193)
One JT took out a mortgage on his part of the property without knowledge of other JT. After his death, creditor came, tried to take his half of property.
Held that if title passed with the mortgage, that would destroy unity of title and would create TIC that creditor could get to. Because this mortgage only put lien on property, none of the unities were destroyed. Was a JT, passed directly to other JT, nothing for creditor to get at.
This is a bad ruling for creditors; in states where liens rather than title pass with mortgages, creditors require signatures from both JTs.
Joint Tenancy (non-marital) Creation
“Four Unities” required:
1.Unity of interest - interests granted must be identical.
2.Unity of title - interests must be created in the same grant/instrument.
3.Unity of time - interests must vest at the same moment.
4.Unity of possession - required owners to have equal rights of access to and use of all portions of the land.
—Third party straw man often used to create the interest so that it fulfilled the four unities.
Some states have disregard this rigid application of the rule.
Joint Tenancy (non-marital) Termination
- By contract if all JTs agree.
- Simultaneous death of all JTs.
- Murder of one JT by other JT.
- Divorce of JTs.
- In some states, by unilateral act of one JT.
Policy arguemnts for/against unilater severnce of joint
Policy arguments for unilateral termination…
-Inefficient to just convey interest to straw man then convey back.
Policy arguments against unilateral termination…
-Fairness and notice issues for the party in the dark.
-Party in the dark would have an incentive to find and destroy the unilateral instrument. (some states require recording now to prevent fraud)
Ex. Riddle v. Harmon (Supp)
Husband and wife JTs, wife did not want husband to get her share after her death. Drew up document that purported to terminate the JT and grant herself 50% interest in the property. Destroyed time and title unities. Husband was unaware.
Held that she could unilaterally terminate the JT and create a TIC. Old rule of requiring straw man is inefficient and based upon medieval assumptions.
Tennecy by entirety
Tenancy by the Entirety (marital)
- 4 Unities + Marriage. (need explicit language too)
- Same as JT but cannot sever through conveyance to third party.
- Severing is only available through contract or divorce.
- One TBE co-tenant may not take out mortgage without consent of other TBE co-tenant.
Issues with physical (in kind) partition:
Might not promote interests of owners.
Might not be most efficient method.
NOTE: What are the goals of property we are trying to further here?
Ouster
Ouster occurs if one co-tenant bars another from using the property.
Ousted co-tenant can seek an injunction and damages.
NOTE: Occupying tenant’s claim can ripen into an adverse possession claim after ouster. Usually, co-tenants can’t adversely possess, but if they oust others, they can.
Contribution
A co-tenant can demand contribution for certain expenditures, such as taxes, mortgage, insurance, and vital repairs.
- However, cannot demand contribution for improvements to the property unless there was a prior agreement pertaining to them.
- When partitioning occurs, courts try to give improver the improved land or money for the improved value.
Accounting action
Arises when:
- The co-tenant leases to a third party and must share proceeds with other co-tenants. One co-tenant cannot lawfully sign a lease binding all tenants w/o the consent of the other co-tenants.
- A co-tenant has depleted natural resources. A co-tenant usually is unsuccessful in a claim of waste. BUT, can recover some proceeds from depletion through accounting.
Questions in an accounting claim:
1.Were the other co-tenants excluded?
2.Was the resource depleted in a wasteful way?
3.Did the co-tenant take more than their share?
NOTE: This may depend not just on quantity taken/quantity available, but also on quality of natural resource taken. Depends on characteristics of resource.
Termination of joint tenacy
iv. Termination: The right of survivorship may be severed, and the estate converted to a tenancy in common by: SPAM – Sale, Partition And Mortgage.
1. Joint tenant can sell or transfer her interest during her lifetime → the purchaser/transferee becomes a tenant in common, but the joint tenant remains in tact as between the other, non-transferring JTs
a. A, B, C are joint tenants. C transfers interest to D; B dies; A owns 2/3 interest, D owns 1/3
Effect of mortgage on joint tenacy
- Effect of Mortgage:
a. Minority view - title theory of mortgage: mortgage severs the JT as to that encumbered share
b. Majority view - lien theory of mortgage: mortgage will NOT severe the JT
