Can't sell the deceased's house because the other joint owner is also deceased - now what?

This reader wrote to me after what appears to be years of frustration with trying to deal with two entwined estates. At the root of the issue is the fact that a joint owner of a house did not take steps to update the title after the other joint owner died. Toss in a lost will and you have an interesting situation. Neither a lost will nor a failure to deal with a land title is at all uncommon, so I thought I'd share this reader's dilemma here.

Here is the question (or should I call it a cry of desperation?):

"I hope beyond hope you can help me. Grandfather died in 1988. Grandmother was co-owner of the house. Aunt was named executrix of Grandfather's will. Aunt lost the original will. We have copies. The will wasn't probated. Grandmother died in 2001. Her estate was probated and dealt with, except for house (paid off) which we cannot sell due to joint ownership. Not one lawyer will touch this. Not sure where to start. HELP!"

 

This isn't really that complicated. If no lawyer will touch it, it's because you're asking the wrong lawyers. Find someone who specializes in wills and estates by calling the Canadian Bar Association (not the Law Society) in your province. You can also google wills and estates lawyers, then read the profiles of lawyers in your area to determine whether they have the necessary experience.

 

In order to proceed with the sale of the house, first your grandfather's name must come off the title. To do that, your aunt needs to probate your grandfather's will so that his executor will have the legal ability to sign documents on his behalf. If the original has been lost, she needs to try to probate a copy of it. That isn't done often, but can be done in certain circumstances with the permission of the court.  It's more complicated than probating an original, but not impossible.

 

If your aunt is reluctant to act, you might remind her that she may be personally responsible (i.e. not covered by the estate but out of her own pocket) for any loss that occurs to the house, loss of rent since 2001, any capital gains tax that accrues while the house is waiting to be sold, and any court costs/lawyer's fees if you have to force her to take steps. Perhaps she would find that information to be motivational.

 

It wouldn't have been necessary for your grandfather's will to be probated if your grandmother had taken your grandfather's name off the title herself after he died. She, like any surviving joint tenant, could have simply gone to the land titles office with a death certificate and had the title changed over to her name alone. But since she didn't, and may have had no idea that she could even do that, now probate is needed so that someone has legal authority to deal with the title.

 

Once your aunt obtains probate, she will have the legal authority to take your grandfather's name off the title. After that, the executor of your grandmother's estate can arrange to sell the property. The proceeds will go into the grandmother's estate, not the grandfather's estate.

 

This situation isn't really all that unusual, in the sense that surviving joint tenants often don't realize that they have to do anything with the title to their home. They understand that when one joint tenant dies, the other automatically owns the house. The word "automatically" is misleading, as it implies that no action needs to be taken. More accurately, the surviving joint tenant has the right of ownership, but must make sure that the title record is brought up to date at the land titles office.

 

In your case, the loss of the original will does complicate things somewhat, but it's not impossible to deal with. The key for you is going to be finding someone with the required depth of knowledge in this area of law.

An automatic right to inherit doesn't mean executor has nothing to do

Today I'd like to clear up a common but dangerous misunderstanding of language that causes a lot of trouble for a lot of families when dealing with estates. The problem arises from statements such as "the assets automatically go to the deceased's spouse".

When I and other lawyers say that an asset automatically goes to a certain beneficiary, we mean that the beneficiary has the legal right to inherit that asset. Generally that means that the right to inherit exists even without probate being obtained, and without anyone having to go to court. We do NOT mean that nobody needs to do anything to make it happen.

I hear over and over again from family members, beneficiaries and especially executors, that they think they don't need to take any steps because the inheritance is "automatic". Yes, the legal right arises automatically, but in every case the executor - or someone else - has to take steps to enforce that right.

To illustrate what I mean, let's look at some of the assets that commonly "go automatically" to a surviving spouse, or other surviving beneficiary. One of the most common is a jointly owned home. As you have read here in my blog and in other places, when one joint owner dies, the other joint owner will automatically own the entire house. That means the surviving joint tenant has the right to own the whole house and probate is not required. Think about the logistics of this. Whose name is on the title? There are two names. When one dies, there are STILL two names on the title if nobody gives a death certificate to the Land Titles Office and fills in the paperwork to take one name off. The Land Titles people don't know that someone has passed away, and even if they did, they aren't going to take steps without instructions from the person legally entitled to give them.

Let's look at a joint bank account. Same thing. There are still going to be two names on the account if nobody advises the bank that one of the owners has died.

Another asset that "automatically" transfers legal ownership is a life insurance policy. It is "automatic" because the deceased person named a beneficiary of the policy and probate is not required. But if you just sit and wait for your cheque to arrive, you will be disappointed. Someone has to provide notice and paperwork to the life insurance company to make the claim.

The executor is not necessarily the person who has to do all of the paperwork in these situations. However he or she should at the very least make sure that he provides copies of the will and death certificate where appropriate, and lets beneficiaries of joint property know of their right to inherit. The beneficiary can then notify the bank, the Land Titles Office, the pension office, or life insurance company. If an executor isn't sure that he or she has covered all the bases, he or she can consult a lawyer, or find an executor's checklist from a reliable source.

I cover this topic in my book, "Alberta Probate Kit", but the principles discussed here are not limited to Alberta.

What if I inherit the house from my mom, but my deceased dad's name is still on it?

This is a common scenario: a married couple puts their home in both of their names as joint tenants. Years later, the husband passes away. The mother makes a will leaving the house to her son. Then the mother passes away and the son begins to deal with the will.

This should be a straightforward estate, since the mother kept her will up to date and there is only one child. But one important step was never taken - the step of taking the father's name off the house title. Now it's going to be a whole different story for the son trying to sort things out.

After a joint owner passes away, that owner's name stays on the title until the surviving joint owner asks the Land Titles registry to remove it. After all, the Land Titles people don't know that the owner died, so the name isn't going to come off automatically. The surviving joint owner simply has to take a government-issued death certificate down to the Land Titles registry, swear an affidavit or declaration there, and ask for the change to be made. It takes very little time and doesn't cost much.

Unfortunately, many people either don't know they have to request a change, or don't know how to go about it, so it is never done.

Once the mother in this scenario has also passed away, there is a problem. The mother's will enables the son to deal with her assets, but the asset still has two names on it. The son can't deal with the father's title under the mother's will. If the father left a will that named the son as executor (or named the mother as first executor, and the son as an alternate), then the son would have to probate that will as well as the mother's will to deal with the house. Of course this increases his work, his costs and his delay.

If the father hasn't left a will appointing the son as executor, the son might end up getting a court order to allow him to take the father's name off the title to the home.

This is something you might consider mentioning to your parent if he or she has been widowed. Check to see that the title was updated after one parent passed away. Your surviving parent might appreciate a ride to the registry and some help with the paperwork, and it will save quite a bit of work and money after both parents are gone.

Don't forget to transfer joint title to surviving owner when one passes away

Most people realize that when one joint owner passes away, the other one - the surviving joint tenant - automatically owns the property. This right of survivorship is the main reason that people own property in joint ownership in the first place. However, many surviving joint tenants don't realize that the Land Titles Office isn't going to change the title to the property automatically. The surviving joint tenant has to ask them to do that.

In order to change the title from joint owners to the surviving owner, that surviving owner will have to fill in a brief document at the Land Titles Office (or lawyer's office). Along with the document, the Land Titles Office will require an original Death Certificate. It must be the government-issued Death Certificate and not the Funeral Director's Statement of Death. In the document, the surviving owner will say that the other owner has passed away, offering the Death Certificate as proof, and ask that the title be amended to show only one name.

I've heard a number of surviving owners and a few executors ask why they should bother. Here's why. Say Jack and Janet are married and they put their home into joint names. Janet passes away and her Will doesn't need to be probated because everything is in joint names with Jack. He doesn't bother taking Janet's name off the title. Years later, Jack dies and his executor tries to sell the house. Jack's executor can sign on his behalf because Jack's Will was probated. But who can sign for Janet? Her name is still on the title. Jack's executor would then have to get Janet's Will probated too because there is no longer a surviving owner.

That is assuming her Will can still be found and hasn't been destroyed. And assuming that she named an executor other than the deceased Jack. You can see how a simple transaction all of a sudden becomes REALLY complicated.

The best idea is to file the necessary document at the Land Titles Office as soon as may be practical after the death of the first joint owner.

Answering more questions about joint property

I really do try to answer readers' questions as quickly as possible but I'm the first to admit that sometimes it takes me a while to get to them all.

I continue to get tons of questions about joint tenancy of homes, and about tenancy-in-common. I'll answer a few of them briefly here (let me know if you need more expanded answers):

Q: My spouse, who is also the joint tenant of our home, has died. How do I change the title into my name only?
A: Take an original Death Certificate (not Funeral Director's Statement of Death) to the Land Titles Office. You will fill in a document called a Declaration of Surviving Joint Tenant, or variations on that in other provinces. You then hand in the document to the Land Titles Clerk, who will amend the title for you. You do not need probate for this.

Q: Two people own a house as joint tenants. What happens if one dies and the surviving joint tenant has Alzheimer's disease?
A: The surviving joint tenant still gets to own the house, with or without Alzheimer's disease, as that is the legal right given by joint tenancy. The question may really be about the logistics of the paperwork, since a person with advanced dementia is not able to understand and sign legal documents. Who can act for this person? If the person with Alzheimer's disease has an Enduring (Continuing) Power of Attorney, it may be used to deal with the land. If there is no Power of Attorney, it may be necessary for someone to be appointed as a trustee by the court.

Q: What happens if both joint tenants die at the same time and there is no Will?
A: If it is impossible to tell which of the joint tenants died first, the law says that the one who is younger is deemed to have outlived the older one. This means the joint title first transfers to that joint tenant, leaving the land in his or her name only. If there is no Will, all of the assets of that person, including the land that used to be in joint tenancy, will be distributed according to the provincial intestacy laws. In Alberta, that would mean children of the second joint tenant first. If there are no children, then his or her parents. If there are no surviving parents, then siblings. Nothing will go to the family of the older joint tenant who died first. See my earlier post here about survivorship of the younger person.

Q: Does a joint title change to tenancy-in-common if one of the joint owners remarries?
A: Nothing is going to happen automatically if one remarries. The title will stay the same until the joint owners both sign documents to bring about a change. One can't do it on his or her own. Remarriage on its own won't change anything. If this question refers to a house that was the matrimonial home and now the couple is splitting up, I assume that the house will be dealt with in the subsequent property division. In other words, you'll divide everything up and one of you will get the house. As part of that agreement, you'll both sign a Transfer of Land document that transfers the house to one owner only.