Q: Here’s my question: Let’s say a husband and wife own a rental property with a joint tenancy and a right to survivorship deed. Later, they divorce without changing the deed, and 10 years later, one of them passes away.
Does the remaining owner automatically pick-up the ownership for the deceased owner’s share? Does the divorce revoke the survivorship deed and make it a deed in common, with a 50/50 split?
A: In some states, the mere fact that two joint tenants decide to get divorced would not, in and of itself, automatically terminate a joint tenancy.
There may be valid reasons why two joint tenants who get divorced want to retain ownership of the property as joint tenants. It may be that they still intend to have the other remain the owner of the home, or neither has the money to buy the other out and each believes that if one of them dies, the other one should get the home
And while I’m not an attorney, I don’t believe that joint tenancy is automatically severed solely due to the fact that the joint tenants elected to get divorced.
As a practical matter, most dispositions of real estate between divorced couples are settled as part of the divorce decree. As part of this process, one of the spouses typically transfers his or her interest to the other spouse..
Generally one of the joint tenants must take specific action to break the joint tenancy to then create a tenancy in common. In a tenancy in common, each owner of a property owns a percentage interest in the home and he or she can sell that interest and if that owner dies, that person’s will or the inheritance laws in that state would dictate who would then become owner of that share of the home.
So one of the owners would have to sell or convey his or her interest in the home to break the joint tenancy or execute some form of a document to give notice that the joint tenancy has ended.
Whether the divorce document is sufficient to do that is questionable, unless there was a court order stating that the joint tenancy should be terminated and a tenancy in common was created.
But in the absence of any action taken by either or both parties, I believe the joint tenancy would remain in effect and the surviving joint tenant would become the 100 percent owner of the property upon the death of the deceased joint tenant.
Laws vary from state to state, and you should consult with a capable real estate or estate planning lawyer licensed to practice in your state for a definitive answer to this question.