Joint Tenancy – The Difficulties Continue

In July, 2014, Amanda Winters posted on our blog about joint tenancies.  She noted some of the difficulties that can arise in using joint tenancies as an estate planning tool.  At our offices, we have noticed that issues with joint tenancies are increasingly arising in estate files, often leading to contentious litigation.

On September 16, 2014, the British Columbia Court of Appeal decided a new case about a father transferring his property into joint tenancy with his son.  The case, Lorintt v. Boda, is reported here.

In Lorintt, dad owned a piece of real estate.  In 2000, dad transferred the property into joint tenancy with himself and his only child (son).  After dad died, the Executor of dad’s estate sought a declaration that son held the property in trust for dad’s estate.  The trial judge dismissed the claim, holding that dad intended to gift the property to son, and that the presumption of resulting trust was rebutted.  The Court of Appeal dismissed the appeal.

The facts of this case are curious, as dad had provided some evidence during his lifetime to indicate that he did not intend son to receive the property upon dad’s death.  Here is a brief summary of the facts:

• In February 2000, dad attended at his lawyer’s office with son.  Dad signed a Form A transfer document, to transfer the property into joint tenancy with son.  The Form A was registered with the Land Title Office, and the property transferred into joint names with dad and son.

• Within 2 weeks, dad had a falling out with the son.  Dad went back to the lawyer’s office and asked to transfer the property back into dad’s name.  The lawyer advised that both dad and son had to sign a new Form A transfer document, to transfer the property back to dad.  Nothing more seemed to happen.

• Dad and son did not talk between 2000 – 2004.

• In early 2004, dad had some health troubles.  The Public Guardian and Trustee (PGT) was appointed to act as dad’s committee.

• Later in 2004, dad was not happy with the PGT acting as his committee.  Dad asked son to become the committee.  Son applied to become dad’s committee, and the PGT did not oppose son’s appointment.  Son was granted committeeship over dad’s affairs.

• In 2006, dad and son had a falling out.  Dad hired a new lawyer, seeking to cancel the son’s committeeship, to make a new Will and to sever the joint tenancy.

• The new lawyer retained a doctor to assess dad’s mental capacity.  The doctor gave dad a passing test for testamentary capacity.  However, the doctor noted that dad thought that son had stolen dad’s things, and that dad lacked some insight and judgment.  Dad made a new Will, leaving nothing to son.

• Dad brought an application to have son removed as committee, and to have a friend appointed as dad’s committee instead.

• As part of the committeeship application, dad swore an affidavit that he never intended for son to get the beneficial interest in property.  Dad swore that son had manipulated dad into executing the transfer.  Dad further swore that he didn’t understand the document the original lawyer had prepared to transfer the property, and that dad would not have signed the Form A transfer document if dad had properly understood the effect of the document.

• In 2006, the Court removed son as committee.  The Court declined to appoint the friend as committee, and instead appointed the PGT as committee.

• In 2008, dad died.

• A few months after dad’s death, son obtained Letters of Administration, because a Will was not found.

• Sometime later, a friend of dad’s found the Will.  The friend applied and was granted probate, and the Letters of Administration were cancelled.

• The friend then brought the application to try to get the property back into the Estate.

The trial judge found that dad was aware and consenting to the property transfer when it was done.  The trial judge found that dad’s evidence from 2006 was ambiguous or wrong, perhaps because dad had become incapable or was suffering from dementia.

The Court of Appeal confirmed that gift was “complete” once the Form A transfer document was registered.  The right of survivorship vested when the gift was made (para. 85).  This case emphasizes that the intention of the transferor is the critical factor.  The intention of the transferor will be determined on a case-by-case basis, depending on the particular facts of the situation.

Curiously, the case proceeded by summary trial on affidavits.  There was no cross examination on the affidavits.

This case highlights the impact of transferring a property into joint tenancy with another person.  Once the transfer is complete, the gift has vested and cannot easily be revoked.

If you have questions about estate planning or estate litigation, please feel free to contact one of the lawyers in our Wealth Preservation + Estate Litigation Practice Group.