“When a couple decides to divorce, what happens to jointly held property if one of the parties suddenly dies?”
In my entire career, I can recall only a small handful of cases where a party has died before the case is over. The chances may be low but it does happen.
I remember one occasion when a client’s estranged wife died of cancer. Her illness had been protracted and he had been in no hurry to progress the divorce. When she died, her share of the couple’s jointly owned properties automatically passed to him. Her relations were furious, and they decided to sue.
When I was a law student, one of the more complex areas to grasp was Land Law. It involved concepts arising from the ownership of land by the Crown more than a thousand years previously, and the introduction of William the Conqueror’s feudal system of tenanted land. Some of this law survives to the present day. My study of the subject confirmed that I was never going to carve a career in conveyancing (property transactions) because I found it so deadly dull. I couldn’t wait to get back to litigation.
However, a recent article in the December 2007 issue of Jordans Family Law by the London-based barrister John Wilson (a walking, talking Cambridge-educated brainbox!) reminded me of those not infrequent occasions many years ago when, as a hapless trainee, I sat for long hours examining clients’ title deeds.
In English law, two people can own land jointly, in one of two ways. This harks back to feudal times. They own the land as either “beneficial joint tenants”, or “tenants in common” The type of ownership has implications: if a couple owns land as joint tenants and one party dies, the land passes in its entirety to the surviving partner.
However, if the land is owned as “tenants in common” and one party dies, that partner’s share of the land passes as directed by the partner’s will. If there is no will, the land passes according to the intestacy rules – and the surviving partner does not automatically inherit the other’s share of the land. This type of ownership is useful for inheritance and capital gains tax purposes.
It is a subject that every divorce lawyer should discuss with a new client, because it is possible to “sever” a joint tenancy between parties so that land is thereafter owned as “tenants in common.”
John Wilson’s article raises the issue of what happens when a couple who hold land as joint tenants are getting divorced – and one of the parties suddenly dies. Does the land automatically pass to the other or not? If the tenancy has not been severed, can it be treated as severed nevertheless?
In the case involving my client, his late wife’s solicitors had not severed the joint tenancy before her death. However, her relatives argued that the couple’s joint tenancy had been automatically severed when he had issued the divorce petition on her. They did not succeed. The court followed the authority of a similar 1983 case, Harris v Goddard, in which it was ruled that the “prayer” to sever a joint tenancy was insufficient.
This case is also referred to by John Wilson, who goes on to discuss whether a joint tenancy can be automatically severed by an application for ancillary relief seeking a property adjustment order. In my client’s case, the prevailing view of the Queen’s Counsel we instructed was that it probably would have done, had one ever been issued. In this matter, John Wilson refers to the case of Hunter v Babbage (1994). In this case, a party died after an application for ancillary relief had been made, agreement had been reached and an order of consent relating to the sale of the marital home had been drawn up. The court held that the couple’s joint tenancy had been severed by the agreement that had followed an application for ancillary relief. However, as the agreement was not a court order in that case, it was not necessarily enforceable. Although the order of consent had specified that the proceeds of sale were to be divided in an agreed proportion, the court found the parties owned in equal shares.
In truth, the death of a party is an easy point to protect against. If a wife wishes to sever a joint tenancy and bequeath her half-share elsewhere (usually to her children), she will always want to know if she will then be left homeless if her husband predeceases her before the case is over and leaves his share elsewhere. The answer, of course, is she won’t. Notwithstanding the husband’s bequest, the court will first consider the wife’s claims to a settlement under the Inheritance (Provision for Family and Dependents Act ) 1975. She can expect to receive a similar award to that she would have received if the husband had survived and the court had made an order in the usual way.