Wife "severed" Joint Tenancy

Dear Len & Rosie,

My wife and I owned our home, a condominium, as joint tenants. When she learned she had terminal cancer she recorded a deed for her half of the property, giving it to herself. She also made a will leaving her estate to her two children and our son. My wife died three years ago, but nobody has filed for probate. Can I make a deal with my son and step-children without going through probate?

Jon

Dear Jon,

When multiple owners hold property together in joint tenancy and one of them dies, the surviving joint tenant or joint tenants owns the property automatically, outside of probate. All there is to do is to record the deceased owner’s certificate of death, attached to an affidavit of death of joint tenant.

Your wife threw that plan out of the window by “severing” the joint tenancy. This is perfectly legal as long as the deed was recorded prior to your wife’s death. If she signed the deed within three days of her death, it could also be recorded within seven days after her death.

Assuming she did it right, your wife’s half of the property now belongs to her probate estate and passes under the terms of her will. Again, this is perfectly legal. Your wife had the right to dispose of her assets, even her half of the community property, in any manner she chose.

Normally, your wife’s estate is subject to probate. However, if the gross value of your wife’s share of the property is worth less than $150,000, then her heirs can petition the court under Probate Code section 13150 for an order transferring the home. It’s much easier, cheaper, and faster to do than a full probate. You will still have to get your wife’s interest in the home appraised by a California Probate Referee, but you won’t need to give notice to creditors or prepare an accounting. The whole process shouldn’t take more than a couple of months, and most of that time will be waiting for the Probate Referee to finish his or her appraisal of the property.

Either way, it’s not very good news for you. She left her half of the property to her children, not you. The only real claim you would have against her half of the property would be for the mortgage payments you’ve been making after your wife’s death.

But there is good news. It’s been three years and the children haven’t been clamoring to probate the estate, force a sale of the property, and kick you out to the curb. You ought to be able to make a deal with them. They may even disagree with what their mother did and transfer to you their interests in the home. Let them know that you’ll remember their generosity when you make your own will or trust.

Len & Rosie

Separated Spouses, what happens when one unexpectedly passes away?

Dear Len & Rosie,

My husband died unexpectedly. We were separated but not legally separated. We have filed joint income tax returns since 1968. I have his original will signed and dated in 1976 naming me the executor and beneficiary. I covered him for health care benefits under my job for almost ten years until I retired. I didn't think the will needed to be probated. 

Our two daughters and I are in agreement that we will evenly split any assets even though the will states they would inherit only if I was deceased. It’s the right thing to do for my daughters. He rented a condo but the title of our house remains in both our names. I'm concerned I may need legal advise at some point. Any advice you can give would be deeply appreciate. I am 68 and feeling overwhelmed.

Pam

Dear Pam,

The fact that you were separated from your husband has no effect on the outcome.  You are his surviving spouse, even if he had filed for divorce or legal separation. His estate passes entirely to you because you are named as the beneficiary of his will.

What has to be done depends on how his assets are titled and what they are worth.  For example, the home is apparently in joint tenancy with you, so there's no probate needed for that. All you have to do with the home is execute an Affidavit of Death of Joint Tenant and provide it to the County Recorder together with a couple of property tax forms. Do not be concerned about your property tax. The transfer from your husband to you will not trigger a property tax reassessment under Proposition 13.

As for your husband's accounts, what has to happen depends on how each of them are titled and how much they are worth. If his accounts have joint owners or pay on death beneficiaries, then the accounts pass to them. If the accounts are titled solely in his name, you can collect them 40 days or more after his death using small estate declarations under Probate Code section 13101. If they are worth more than that, in total, you’ll have to either file for probate or file a Spousal Property Petition.

You are being very generous to your daughters, but understand that we cannot recommend to you that your transfer your husband’s half of your home to him now. Doing so would make part of your home subject to the claims of your daughters’ creditors. Adding children to the title of your home is almost always a bad idea.

You, or you and your daughters, should sit down with a trusts and estates attorney to review everything and figure out precisely what to do. If there is no probate (it doesn’t sound like your husband has much money) then it will be simple and inexpensive. After that, you should consider your own estate plan. You should probably create a revocable trust to avoid probate.

Len & Rosie