Published on:

How Property Co-Ownership May Complicate Estate Planning

If you co-own real property with others, it is important to clearly establish each party’s interest. Among other reasons, this can have a significant impact on your estate planning because your will or trust can only dispose of your own interest in real estate. Your estate plan will not affect the rights of the other co-owners in most situations.

Brothers Fight Over Share of Mother’s Property

Here is an illustration from a recent California case. In 1978, a mother and her three children–two sons and a daughter–acquired a piece of real estate in Los Angeles. There were a number of title changes made to the property over the years. According to a 1986 deed, ownership was divided as follows: a one-third interest belonged to a revocable trust established by the mother, a one-third interest belonged to the daughter, and the final one-third interest belonged to one of the sons (who is the defendant in the lawsuit discussed below). In 2002, the daughter effectively transferred her one-third interest to her mother’s trust.

The mother signed a new will in 2009, which revoked her trust and returned her interest in the real property to her as an individual. The mother died in 2012. Her will directed that her “rights and interests in the real property” be transferred to a trust controlled by one of her sons, who is the plaintiff here. The plaintiff and defendant were named co-executors of the estate.

The plaintiff alleged that at the time of his mother’s death, she owned 100% of the property. The defendant objected, noting he still retained a one-third interest under the 1986 deed. The plaintiff argued the defendant’s objection constituted a challenge to their mother’s will, which was barred by a no-contest clause.

The courts did not see it that way. The California Second District Court of Appeal, in a published opinion, affirmed an earlier probate court decision that held the defendant had not, in fact, contested the validity of his mother’s will. Instead, he alleged he is entitled to one-third of the property based on the terms of the 1986 deed, not the will. Accordingly, the plaintiff had no grounds to invoke the no-contest clause.

There were also no evidence that the mother “ever sought to quiet title [or] requested defendant relinquish his one-third interest” in the property during her lifetime. The Second District therefore also agreed with the probate court that the defendant continued to own a one-third interest in the property at the time of his mother’s death, and her will only disposed of the remaining two-thirds interest.

Need Help From a California Estate Planning Lawyer?

Real property ownership can get complicated, especially when family members are involved as co-owners. But it critical to sort out any questions regarding title to your property before you die. The last thing you want is children fighting over who is entitled to a share of your house. If you need advice on preparing a will or trust and need to speak with an experienced San Diego estate planning attorney, contact the Law Office of Scott C. Soady today.

Contact Information