Situation
During a real estate transaction for investment property which had been purchased by a husband and wife, I learned that the property was held in tenancy in common, not joint tenancy. The husband had passed away without a Will, and now, instead of a simple transfer by the wife, half of the property was owned by the wife and the other half was half the wife’s and one-eighth each by each of the sons. We were fortunate that the family got along with each other, but the implications of what could have been have left me concerned about other transactions I will see in the future.
With a joint tenancy, when one of the parties dies, the other party automatically becomes the owner of the property. In cases where the owners are in their senior years, people forget how they titled property and why they titled it the way they did. Did Dad want to make sure that the sons took care to help Mom? Did Dad not Trust Mom? Did Mom not understand why she was removed from an automatic transfer to her?
In this situation, the broker dealing with the property had the wrong section on financing. The issue raised the question of whether everybody would need to re-sign the initial document or if we could correct it with attorney review.
Challenge
The problem with disorganization in any non-joint tenancy ownership situation is that when one party passes, questions arise, like: Who is the rightful owner now? Does the property need to be probated? Can the property be sold using Affidavits of Heirship?
In this case, without a Will the property was left to the living spouse (half of the Tenancy in Common) and because she was entitled to her marital share, the other half went half to the spouse and the other one-quarter was split between the sons. The original paperwork had been filed decades ago without instruction in the event of the signing spouse’s passing. Therefore, there was no way to change the title.
Solution
Taking time to go back and forth, getting documents straightened out, and filing required forms, Minchella & Associates was able to help the surviving owner prove ownership in public records.
Had the property been in a Joint Tenancy, on the signing of an Affidavit of Survivorship or a Deceased Joint Tenant Affidavit or proof to the title company that a Joint Tenant had died, the property would have automatically transferred to the surviving joint tenant. With the Tenancy being “in Common”, it became significantly more complicated and could have been worse if the sons were not willing to cooperate in the disposition of the property.
The Affidavit of Survivorship removes the deceased owner’s name from the property deed by recording the death in local land records. A Deceased Joint Tenant Affidavit is a similar document. In Illinois, it must be signed by an acquaintance of the deceased and notarized. This is not complicated if no estate planning was done ahead of time because the transfer is essentially automatic.
Outcome
As people age, it is a good idea for them to check the manner in which they hold title to their properties. It is especially difficult when family members do not get along or when unmarried parties own property together. Finding out how title is held before the contract is signed might protect against significant time and dollars needing to be spent to sort things out.
We feel so passionately about this, that we offer it as a service to any broker who calls us for property in Cook County.
