by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Here are a couple of cases involving parties who gave joint tenancy interests as gifts and later changed their minds. One managed to undo the deal - the other did not. There are no great lessons here, but I thought it might be fun to reflect for a moment on the joint tenancy concept.
In my experience, I don't think I've ever come across a situation where joint tenancy is a preferred solution to a client's objectives. The problem is not so much the " change of heart" situation we see in this cases, but rather with the fact that either party, or a creditor of either party, can undo the joint tenancy by unilateral action. I understand that in some midwestern states, such as Iowa, a marital joint tenancy is non-severable - more like a tenancy by the entireties. This makes the device more acceptable. But outside of that context, there's gotta be a better way.
COTENANCIES; JOINT TENANCY; DONEE: Joint tenancy created as gift in anticipation of donee's subsequent marriage to donor does not represent an irrevocable gift to donee where marriage does not occur, even though deed is unconditional on its face. Boydstun v. Loveless, 890 P.2d 267 (Colo. Ct. App. 1995). While living with defendant, donor purchased property and titled it in joint tenancy with defendant. Later, the parties split without having married., and the donee of the joint tenancy sought a divorce decree in Texas, alleging a common law marriage. The court dismissed the suit, concluding that there was no common law marriage.
The Texas lawyer of the donee, in an attempt to collect fees, sought to sever and attach her interest in the joint tenancy property. Donor sought a decree that defendant had no interest in the property. Donor's uncontroverted testimony was that he put property in joint tenancy as a conditional gift in contemplation of marriage. Because an essential requirement of an inter vivos gift is the clear and unmistakable intention to make a gift, the intent of the putative donor was held to be determinative. Gifts made in contemplation of marriage are presumed to be conditioned on the marriage taking place.
The Colorado court acknowledges that other cases hold that an unconditional deed in joint tenancy creates such a present joint tenancy interest. Further, it concedes that the joint tenancy interest likely is valid with respect to third parties relying upon the deed, but nevertheless holds that the deed is voidable where, as here, both parties fully understand the condition of marriage and the Texas lawyer was fully aware of the condition.
DECEDENT'S ESTATES; JOINT TENANCY: Property held in joint tenancy is not devisable by will. A testator's mistaken belief that he can sever a joint tenancy through a will is insufficient to support an action by the legatee for equitable relief. Matter of Estate of Kokjohn, 531 N.W.2d 99 (Iowa 1995). Testator provided in his will that bank accounts held in joint ownership with others was done so for convenience only and that upon his demise these accounts were to be made part of his estate for equal distribution. The testator and one sister's name were on the signature card of an account at a particular bank that indicated by separate agreement that the balance was to be paid to any one such tenant or to the survivor.
First, the legatee under the will argued that there was no joint tenancy because of the presumption that a joint bank account is a tenancy in common. The court had to deal with the meaning of the signature card, which tended to rebut that presumption and create a joint tenancy. As this was a case of first impression the court looked to a number of other jurisdictions before deciding on how "the doctrine of incorporation by reference" should be applied to facts at hand. The court adopted the requirement that a reference between documents must be clear and specific. Applying this requirement to the facts at hand, the court found the signature card to explicitly refer to the deposit agreement which had been executed contemporaneously with the signature cards. This was enough to make the bank account a joint tenancy.
Despite the testator's belief that he could undo the joint tenancy by testamentary disposition, he was mistaken. A mistake regarding the legal consequences of known facts cannot serve as a basis for relief.
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