Joint Property Owners: Secret Severances Can Steal Your Inheritance

Do you jointly own property with someone? A secret severance can steal your survivorship rights to your most valuable asset – your home. Worse, it can force you into a lawsuit. Here is what you need to know.

Is your home in joint tenancy with a spouse or partner? If your spouse dies, you may expect to inherit the property. However, your spouse could have secretly cut out your inheritance rights. Without your consent, he or she could have severed the joint tenancy.

This catastrophe can happen to you. How can you prevent it?

Severance Ends Rights of Survivorship

A severance ends the joint tenancy. The severance stops the automatic inheritance of your deceased spouse’s half of the home. It leads to the loss of your home and triggers a lawsuit.

You need to know some basics about jointly owned real estate. Let me explain.

Two Ways Co-owners Hold Title to Real Estate

The title deeds to real estate can record co-ownership in two ways – “joint tenants” or “tenants in common.”

The owners of real estate are not tenants. The law, however, refers to them either as joint tenants or tenants in common. Find more information in my post Joint Tenancy vs. Tenants in Common: What’s the Difference?

Joint Tenancy Provides a Right of Survivorship

When a joint tenant dies, their interest in the property passes to the surviving joint owner.

What about when a tenant in common owner dies? Their tenancy in common interest passes through their estate by their will. The surviving tenant in common does not automatically inherit the property.

What if your deed does not specify a right of survivorship? A tenants in common situation exists.

Tenants in Common Interests Pass by Will

Anthony and his brother, Marco, purchase a rental property. Marco paid 75% of the purchase price. Anthony paid only 25%. The deed to the rental property shows this registered ownership:

 • Marco as to 75% interest

 • Anthony as to 25%

 • as “tenants-in-common”

Anthony can deal with his property interest (75%) as he choses. In their wills, both brothers can leave their share of the property to their children or charity.

Specific Rules for Jointly Owned Property

1.A joint owner does not owe rent to the other joint tenant unless there is a written agreement.

2.A severance converts the property from joint ownership to tenants in common.

3.You cannot sever a joint tenancy under your will. The interest of a joint tenant does not form part of the deceased’s estate. Therefore, it is not within the will maker’s power to control it.

A joint owner must make a unilateral severance while alive.

A joint tenancy can be “severed” in many ways. The most common is a unilateral act of transfer to a third party.

What does that mean? Let me explain with two examples.

Frank mortgages his joint property interest. He takes a mortgage loan from a third party without Marla’s consent.

Frank could also register a deed to himself. This unilateral act also terminates the joint ownership.

These two examples show how Frank can unilaterally sever the joint tenancy. Marla has no knowledge of what Frank did. She did not have to consent.

Will This Start a Lawsuit?

The severance deprives Marla of her right to inherit her home. This can cause her a lot of pain. Will she have to pay rent to Frank’s estate or sell the home?

Marla may have to deal with Frank’s estate to remain in her home. In the case of blended families and second marriages, Frank’s severance could force Marla into a lawsuit. She may need to sue Frank’s estate.

These are claims that will become more frequent with blended families.

Free Telephone Consultation

I have experience with a number of such cases. If you are involved in such a dispute, call 1.877.679.4557 for a free telephone consultation.

Call me for a telephone consultation if you are a victim of a secret severance. 1.877.MR.WILLS (1.877.679.4557). Ask for Ed.

See my related blog posts:

• Joint Tenancy v. Tenancy in common – What’s the Difference?

• Jointly-Owned Property Sparks Estate Lawsuits: Will You Be a Victim?

• How Joint Liability Creates Estate Problems

Edward Olkovich (BA, LLB, TEP, and C.S.) is a nationally recognized author and estate expert. He is a Toronto estate lawyer and Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of seven books. 

This information is not financial, legal, tax advice or a substitute for professional advice. Always consult with a professional before taking any action.