Wednesday, March 08, 2006

Waters on Joint Tenancies

I have heard lawyers and law professors who have the gift of making difficult legal concepts understandable. I know lawyers who are very good at explaining practical estate planning or other legal problems. I am occasionally treated to hearing speakers set the law in historical contexts. But I don’t think I have heard anyone who can explain a topic like joint tenancy quite the way Donovan Waters did Tuesday night at the joint meeting of the Kelowna Estate Planning Society and the Okanagan Wills and Trusts Subsection of the Canadian Bar Association, B.C. Branch.

Professor Waters can discuss a topic at an abstract level using metaphors that everyone understands, set it in its historical context, and deal with the kind of practical problems practicing lawyers and their clients face on a day-to-day basis. But it is not in a “I will now spend the next ten minutes dealing with the historical roots …” manner. Instead, he seems to be able to approach an issue from several different perspectives in a few sentences, with remarkable coherence.

Although I know how joint tenancies work, and I have written about a few of the practical problems with joint tenancies (see my posts on joint bank accounts, real estate joint tenancies, and severing joint tenancies), I have never felt that I fully grasp the concept. I still have a ways to go, but I am closer after Tuesday night.

Professor Waters described the interests of joint tenants as mirrors of each other, and on the death of one, the interests merge in the other. He also used Jekyll and Hyde as a metaphor.

Many couples own their house in joint tenancy, but don’t understand the concept. Each will say, “I own some of this,” and “he owns some of this.” They think in terms of a tenancy in common, rather than joint tenancy. (In a joint tenancy, on the death of one joint tenant, the survivor takes the whole interest in the property by right of survivorship, but if two people own property as tenants in common, on the death of one, the interest of the deceased owner flows through his or her estate to the beneficiaries of his or her will.)

Nor do lawyers in continental Europe, or other civil law systems, including Quebec, deal with joint tenancies. It is an English common law invention.

Joint tenancy is often not the best tool for estate planning. Good estate planning requires predictability and flexibility. When two people own property as joint tenants, we do not know who is going to die first. This creates a great deal of uncertainty given that the survivor acquires the whole.

Professor Waters described joint tenancies as fair-weather planning. If a relationship changes, either owner can sever the joint tenancy without the other’s agreement or even knowledge. In some cases a joint tenancy is severed without the owners realizing that they have severed it.

He considers the use of inter vivos (or living) trusts as a much better estate-planning tool.

I have tried to describe just a few of Professor Waters points, and I hope I have done so accurately. I do not have the writing ability to capture his enthusiasm and wit, which were the things I liked best about his presentation.

He left us with a question: Can you make a binding agreement not to sever a joint tenancy?

Donovan Waters Q.C. is Professor Emeritus at the University of Victoria, and counsel to the law firm of Horne Coupar in Victoria. For more information about Professor Waters, see Horne Coupar's website here. Waters Law of Trusts in Canada, 3rd Edition is available here.

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