[WSBAPT] Title question

Wed Apr 29 15:38:28 PDT 2015

Lisa, I believe it to be four joint tenants. 

“Unity of interest <http://thelawdictionary.org/unity-of-interest/> , possession <http://thelawdictionary.org/possession/> , time, title. Joint-tenancy agreement's legal requirements <http://thelawdictionary.org/requirements/> . (1) Unity of interest is the requirement that in duration, extent, and nature, all joint-tenants must have the same interest . (2) Unity of possession <http://thelawdictionary.org/unity-of-possession/>  is the requirement that no joint-tenant shall have exclusive possession of the whole property; that each joint-tenant simultaneously with other joint-tenants must have undivided share of the property. (3) Unity of time is the requirement that at the same time and for the same period, all joint-tenants must vest. (4) Unity of title is the requirement that in this single instrument <http://thelawdictionary.org/instrument/> , all joint-tenants must have equal property title.” 
Law Dictionary:  <http://thelawdictionary.org/four-unities/#ixzz3YjpotX52> What is FOUR UNITIES? definition of FOUR UNITIES (Black's Law Dictionary) 

Irrespective of whether one could argue for the treatment of a marital community as a single entity for JTWROS purposes (which I question), the deed does not specify the marital communities as grantees, but just the individuals, so there are four JTs. 

I suggest the use of a trust, for the following reasons:

First, the common law concept of JTWROS requires that if one joint tenant dies, the remaining JTs hold equal interests. That means that upon the first death, the others hold 1/3 interests, so if the child dies, the parents and son-in-law hold the property as JTWROS, perhaps not the intended result if the son-in-law remarries. 

Next, the joint ownership exposes the property to the others’ creditors. So if the son-in-law incurs debt in a bad business deal, the property is an asset which can be the subject of a forced sale. (This response infers from your post that the parents are the property owners or purchasers. If the purchase was a joint endeavor – as when parents help a child with a home purchase – it may be inapposite.) 

Finally, contingency planning becomes available. By using a trust, for example, one can provide that the child’s interest in the property will pass to her children if she fails to survive the parents. Other issues can also be addressed, such as a continuing trust if the grandchildren are below a certain age. If bypassing probate is an objective, use of a trust would also do that. 

Transferring the property into a trust would “break” the joint tenancy. You will need to give thought to the gift tax issues caused by creation of the JTWROS, and, since breaking the joint tenancy will re-adjust rights in the property, whether additional gift tax issues arise. Since creation of the JTWROS appears to have been an agreed upon transaction, and the parties all seem to have accepted the property as such, it is probably not possible to avoid gift issues with a disclaimer. There is also the title insurance issue, which would require either a new policy or possibly an endorsement. 

S  

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Lisa Schuchman
Sent: Wednesday, April 29, 2015 2:12 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Title question

They are trying to devise an estate plan that takes into account the value of both parents’ remaining share of the property when dividing their joint estate between their two children (the co-owner daughter and another child).  If there are two joint tenants, the parental share is more clearly fixed and doesn’t depend on their daughter surviving her husband.  It is a small parcel of property and they might just let it be, but I told them I’d look into it.

Lisa E. Schuchman
206-325-2801
www.lisaschuchman.com <http://www.lisaschuchman.com/> 

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NOTE: I do not use encrypted email.  Messages sent to or from my office via email are not secure and may not be protected by attorney-client privilege. This email address is not monitored at all times.  If your matter is urgent, please phone my office during regular business hours.  

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P  Please consider the trees before printing this document

From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  [mailto:wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com> ] On Behalf Of Lisa Schuchman
Sent: Wednesday, April 29, 2015 1:06 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Title question

 My clients, a married couple, took title to property with their daughter and her husband.  Here is how the deed describes the grantees:

 “Jane Doe and John Doe, wife and husband, and Alice Smith and Bob Smith, wife and husband, as joint tenants with right of survivorship.”

 Do we think this is two joint tenants (two couples) or four (four individuals)?  If four, how can we describe it so it is two?

 Thanks.

Lisa E. Schuchman
206-325-2801 <tel:206-325-2801> 
www.lisaschuchman.com <http://www.lisaschuchman.com/> 

I prefer an excess of caricature to an excess of censorship. -Nicolas Sarkozy

NOTE: I do not use encrypted email.  Messages sent to or from my office via email are not secure and may not be protected by attorney-client privilege. This email address is not monitored at all times.  If your matter is urgent, please phone my office during regular business hours.  

Any tax advice included in this document and its attachments was not intended or written to be used, and it cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

P  Please consider the trees before printing this document

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