Recent Developmentsin Joint Tenancy

April 2, 2009

Diane B. Davies

What is a Joint TenancyWhat is a Joint Tenancy

Form of ownership in which each joint Form of ownership in which each joint tenant possesses the entire estate, rather tenant possesses the entire estate, rather than a fractional share than a fractional share

Four UnitiesFour Unities

InterestInterest TitleTitle Time Time PossessionPossession

Four UnitiesFour UnitiesBlackstoneBlackstone

One and the same interestOne and the same interest Accruing by one and the same Accruing by one and the same

conveyanceconveyance Commencing at one and the same timeCommencing at one and the same time Held by one and the same possessionHeld by one and the same possession

Common LawCommon Law

At early common law, a conveyance to two At early common law, a conveyance to two or more persons (other than a husband or more persons (other than a husband and wife) presumed to create a joint and wife) presumed to create a joint tenancy.tenancy.

Evolved to a presumption of tenancy in Evolved to a presumption of tenancy in commoncommon

Colorado StatutesColorado Statutes

C.R.S. § 38‑31‑101C.R.S. § 38‑31‑101

Predecessor statute adopted by the Predecessor statute adopted by the Territorial Legislature in 1861Territorial Legislature in 1861

Required LanguageRequired Language

In Joint TenancyIn Joint Tenancy As Joint TenantsAs Joint Tenants JTWROSJTWROS As Joint Tenants with Right of SurvivorshipAs Joint Tenants with Right of Survivorship In Joint Tenancy with Right of SurvivorshipIn Joint Tenancy with Right of Survivorship

Deed to SelfDeed to Self

““Any grantor in any such instrument of Any grantor in any such instrument of conveyance may also be one of the conveyance may also be one of the grantees therein.”grantees therein.”

The Four UnitiesThe Four Unities

InterestInterest

TitleTitle

Time Time

PossessionPossession

SurvivorshipSurvivorship

The survivor does not take any new or additional The survivor does not take any new or additional interest on the death of his joint tenant - takes interest on the death of his joint tenant - takes under original conveyance or deviseunder original conveyance or devise

The death of a joint tenant does not result in a The death of a joint tenant does not result in a transfer of that tenant's interest to the survivor, transfer of that tenant's interest to the survivor, but merely terminates any interest of the but merely terminates any interest of the decedentdecedent

Any liens existing against the deceased joint Any liens existing against the deceased joint tenant's interest are extinguishedtenant's interest are extinguished

Result of the unity of interestResult of the unity of interest

Severance of a Joint TenancySeverance of a Joint Tenancy

Conveyance of the interest of one joint tenantConveyance of the interest of one joint tenant Mortgage of one joint tenant’s interest in a title Mortgage of one joint tenant’s interest in a title

theory state – not Coloradotheory state – not Colorado Execution sale on one joint tenant’s interest – Execution sale on one joint tenant’s interest –

but not attachment of judgment lienbut not attachment of judgment lien Contract or agreementContract or agreement Destruction of one of the four unitiesDestruction of one of the four unities Modern View – Intent to terminate right of Modern View – Intent to terminate right of

survivorshipsurvivorship

Severance of Joint TenancySeverance of Joint Tenancy

Felonious killing of a joint tenant Felonious killing of a joint tenant Dissolution of marriage, except as Dissolution of marriage, except as

provided in an agreement or court orderprovided in an agreement or court order Unilaterally executing and recording an Unilaterally executing and recording an

instrument conveying his interest to instrument conveying his interest to himself as tenant in common?himself as tenant in common?

Taylor v. CanterburyTaylor v. Canterbury

Taylor conveyed ranch to himself and Taylor conveyed ranch to himself and Canterbury as joint tenantsCanterbury as joint tenants

Taylor subsequently executed a quitclaim deed Taylor subsequently executed a quitclaim deed from purporting to transfer the property back to from purporting to transfer the property back to himself and Canterbury as tenants in common. himself and Canterbury as tenants in common. The second deed stated: “It is my intention by The second deed stated: “It is my intention by this deed to sever the joint tenancy created by this deed to sever the joint tenancy created by [the 1991 deed], and to create a tenancy in [the 1991 deed], and to create a tenancy in common.” common.”

Taylor diedTaylor died

Taylor v. CanterburyTaylor v. Canterbury

Who owned the property?Who owned the property? Canterbury claimed the deed from Taylor Canterbury claimed the deed from Taylor

to himself was invalid and she owned to himself was invalid and she owned 100% as surviving joint tenant.100% as surviving joint tenant.

Trial court and court of appeals concluded Trial court and court of appeals concluded that once a joint tenancy is created, the that once a joint tenancy is created, the rights of each joint tenant are “fixed and rights of each joint tenant are “fixed and vested.” Held that Taylor couldn’t vested.” Held that Taylor couldn’t unilaterally sever.unilaterally sever.

Canterbury v. TaylorCanterbury v. Taylor

Supreme Court concluded:Supreme Court concluded: Deed to self validDeed to self valid Four unities abolishedFour unities abolished Creation and severance of joint tenancy Creation and severance of joint tenancy

depend on the intent of the partiesdepend on the intent of the parties

2006 Amendments to2006 Amendments toCo-Tenancy LawCo-Tenancy Law

Provides the exclusive method of creating a joint Provides the exclusive method of creating a joint tenancytenancy

Confirms that a joint tenancy may only be Confirms that a joint tenancy may only be created between natural persons, except in the created between natural persons, except in the case of fiduciariescase of fiduciaries

Created a presumption that a conveyance to two Created a presumption that a conveyance to two fiduciaries creates a joint tenancyfiduciaries creates a joint tenancy

Any conveyance to two or more persons which Any conveyance to two or more persons which does not create a joint tenancy creates a does not create a joint tenancy creates a tenancy in commontenancy in common

There is no Tenancy by the Entirety in ColoradoThere is no Tenancy by the Entirety in Colorado

InterestInterest TitleTitle TimeTime PossessionPossession

THE FOUR UNITIESTHE FOUR UNITIES

After Taylor v. CanterburyAfter Taylor v. Canterbury

Are the four unities still relevant?Are the four unities still relevant? Have they been abolished?Have they been abolished?

2008 Amendments 2008 Amendments to CRS 38-31-101to CRS 38-31-101

The doctrine of the four unities of time, title The doctrine of the four unities of time, title interest, and possession is interest, and possession is continued continued as as part of the law of this state, subject to part of the law of this state, subject to certain modifications made by the statutecertain modifications made by the statute

The specified sections which vary from the The specified sections which vary from the common law concept of the four unities, common law concept of the four unities, are intended to are intended to clarify, supplementclarify, supplement, and , and limited to their express terms, modifylimited to their express terms, modify the the four unitiesfour unities

2008 Amendments 2008 Amendments to CRS 38-31-101to CRS 38-31-101

Clarifies and confirms that for the Clarifies and confirms that for the purposes of the statute, the doctrine of the purposes of the statute, the doctrine of the four unities means “the common law four unities means “the common law doctrine that a joint tenancy is created by doctrine that a joint tenancy is created by the conveyance or devise of real property the conveyance or devise of real property to two or more persons at the same time to two or more persons at the same time of the same title to the same interest with of the same title to the same interest with the same right of possession and includes the same right of possession and includes the right of survivorship.”the right of survivorship.”

Variance from Four UnitiesVariance from Four Unities

(1) “Any grantor in any such instrument of (1) “Any grantor in any such instrument of conveyance may also be one of the conveyance may also be one of the grantees therein.”grantees therein.”

Variance from Four UnitiesVariance from Four Unities

5(b) The filing of a petition in bankruptcy by 5(b) The filing of a petition in bankruptcy by a joint tenant shall not sever a joint a joint tenant shall not sever a joint tenancytenancy

Variance from Four UnitiesVariance from Four Unities

6(a) The interests in a joint tenancy may be 6(a) The interests in a joint tenancy may be equal or unequalequal or unequal

Other important changesOther important changes

5(a) joint tenant may sever by unilaterally 5(a) joint tenant may sever by unilaterally executing and recording an instrument executing and recording an instrument conveying his interest to himself or herself conveying his interest to himself or herself as tenant in common.as tenant in common.

Joint tenancy is severed upon recordingJoint tenancy is severed upon recording Joint tenancy continue among other joint Joint tenancy continue among other joint

tenantstenants

Other important changesOther important changes

(6) The interests in a joint tenancy may be (6) The interests in a joint tenancy may be equal or unequalequal or unequal

Presumed to be equalPresumed to be equal Presumption is conclusive if unrecorded Presumption is conclusive if unrecorded

as against person relying on the recordas against person relying on the record

Other important changesOther important changes

Section does not bar claims for equitable Section does not bar claims for equitable relief among joint tenants, including relief among joint tenants, including partition and accountingpartition and accounting

In other words, although interests are In other words, although interests are equal, a court in equity may allocate equal, a court in equity may allocate proceeds differentlyproceeds differently

3 or More Joint Tenants with 3 or More Joint Tenants with Unequal SharesUnequal Shares

Devise to A as to a 60% interest, Devise to A as to a 60% interest,

to B as to a 20% interest, andto B as to a 20% interest, and

C as to a 20% interest, as joint tenantsC as to a 20% interest, as joint tenants

C dies C dies

What interests do A and B have?What interests do A and B have?

Unequal Joint TenancyUnequal Joint Tenancy

75% to A75% to A 25% to B25% to B

Unequal Joint TenancyUnequal Joint Tenancy

A owns 75%A owns 75% B owns 25%B owns 25%

A dies, what does B own?A dies, what does B own?

100%100%

Unequal Joint TenancyUnequal Joint Tenancy

A owns 75%A owns 75% B owns 25%B owns 25%

B executes a deed to himself as tenant in B executes a deed to himself as tenant in common with Acommon with A

What are their interests?What are their interests?

A and B are tenants in commonA and B are tenants in common A owns a 75% interest A owns a 75% interest B owns a 25% interestB owns a 25% interest

If A dies, A’s heirs inherit the 75% interest, If A dies, A’s heirs inherit the 75% interest, and hold as tenants in common with Band hold as tenants in common with B

Important ExceptionImportant Exception

(6)(d) For purposes of the Medical (6)(d) For purposes of the Medical Assistance Act, a joint tenancy shall be Assistance Act, a joint tenancy shall be deemed to be a joint tenancy with equal deemed to be a joint tenancy with equal interests regardless of the language in the interests regardless of the language in the deed or other instrument deed or other instrument

SummarySummary

Use of “magic words” required to create Use of “magic words” required to create joint tenancyjoint tenancy

If not a joint tenancy, tenancy in commonIf not a joint tenancy, tenancy in common Joint tenancy may be equal or unequalJoint tenancy may be equal or unequal Presumed to be equal – conclusive for Presumed to be equal – conclusive for

BFPBFP Joint tenancy may be severed by deed to Joint tenancy may be severed by deed to

selfself

PROOF OF DEATH PROOF OF DEATH 2006 STATUTORY REVISIONS2006 STATUTORY REVISIONS

Specifies the Contents of the Specifies the Contents of the Supplementary AffidavitSupplementary Affidavit

Recognizes Two Conditions – Death Recognizes Two Conditions – Death Certificate Available and Death Certificate Available and Death Certificate Not AvailableCertificate Not Available

TITLE STANDARD 7.1.1TITLE STANDARD 7.1.1

Prior StandardPrior Standard Asks Whether a Death Certificate is Asks Whether a Death Certificate is

Sufficient Without a Supplementary Sufficient Without a Supplementary Affidavit Under §38-31-101Affidavit Under §38-31-101

Responds that it is Sufficient for the Responds that it is Sufficient for the Purposes of §38-35-112 Purposes of §38-35-112

TITLE STANDARD 7.1.1TITLE STANDARD 7.1.1

RevisedRevised Asks Whether a Death Certificate Recorded Asks Whether a Death Certificate Recorded

Along with a Supplementary Affidavit UnderAlong with a Supplementary Affidavit Under§§38-31-101 Makes Title Marketable in Survivor38-31-101 Makes Title Marketable in Survivor Conforms to StatuteConforms to Statute Indicates Application to Life Estate and Indicates Application to Life Estate and

Beneficiary DeedBeneficiary Deed Addresses the Concept of a Verification of Addresses the Concept of a Verification of

DeathDeath Addresses Filing of a Death Certificate and Addresses Filing of a Death Certificate and

Supplementary Affidavit at Different TimesSupplementary Affidavit at Different Times

Recent Developmentsin Joint Tenancy

April 2, 2009

Diane B. Davies