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How Does a Joint Tenancy for Cars Work?

Joint tenancy is a common estate planning tool used to avoid probate. The basic idea is that two (or more) people hold property as “joint tenants.” This means they own the entire property together, and when one co-owner dies the survivor automatically owns 100% of the property outright without having to go through the deceased co-owner’s estate.

Court Rules DMV Title Insufficient to Create Joint Tenancy

Although joint tenancy is most often associated with real property, it can be applied to personal property as well, such as motor vehicles. For instance, spouses may choose to register their car as joint tenants. It is important to register a joint tenancy because a probate court will not assume that was your intention. By default, the law assumes two or more people hold property as “tenants in common,” meaning they each own a separate interest.

A recent California case illustrates how a court may decline to recognize a purported joint tenancy title. The subject of this case is a classic 1969 Ford “muscle” car. The plaintiff initially acquired the car in 1991. 13 years later, he set out to restore the vehicle.

The plaintiff contacted an old high school buddy for help. The friend agreed to pay for the restoration. In exchange, the plaintiff would perform the actual labor. The plaintiff agreed to give his friend co-ownership of the car as part of their joint venture.

The friend was a quadriplegic and required the assistance of caregivers. One of these caregivers went to the DMV with the plaintiff to register the new title to the vehicle. The caregiver claimed the right to sign as the friend’s power of attorney, but in act he never held such authority. Nonetheless, the DMV issued a new title certificate naming the friend “or” the plaintiff as owners.

The plaintiff’s friend died in 2010, about three years after entering into the joint venture. A dispute then arose over ownership of the car. The plaintiff claimed the title issued by the DMV created a joint tenancy, meaning he inherited full ownership upon his friend’s death. The trustee of the friend’s revocable living trust disagreed. He argued the title created a tenancy in common, which meant 50% ownership of the car passed to the trust.

The courts sided with the trustee. The California Second District Court of Appeal said there were numerous problems with the plaintiff’s joint tenancy claim. First, as noted above the purported joint tenancy was based on a title granted on the basis of a non-existent power of attorney. Second, even if the title was valid, the trustee presented sufficient evidence to rebut the presumption it created a joint tenancy. Specifically, the decedent updated his estate plan “and specified that he wanted his investment in the car to go into the Trust, to benefit his family.” At no point did the friend ever state his intention to create a joint tenancy.

Need Advice From a California Estate Planning Lawyer?

The last thing you want confusion over is the status of your property. If you are in a joint venture or co-own property with someone else, it is crucial to establish proper title so as to avoid any potential misunderstandings (or lawsuits). If you need assistance from an experienced San Diego estate planning attorney, contact the Law Office of Scott C. Soady today.

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