Simultaneous Deaths of Joint Tenants

What happens when two people who own land in British Columbia in joint tenancy, or hold bank accounts in joint tenancy with right of survivorship, die in a common accident within a short time of each other?

Three weeks ago, I wrote a post explaining the purpose of clauses in wills or trusts requiring that a beneficiary survive the deceased for thirty days (or some other period) before the beneficiary inherits anything. In a nutshell, in the case of a common accident, this kind of clause avoids the problem of the assets of one person dying in a common accident going to the other's estate, and then everything passing under the other one's will.

In the case of a joint tenancy, we have the same problem that we would have in a will or trust that does not have a thirty-day survivor clause. If one joint owner survives the other by a short period of time, then the title goes to the survivor's estate. Or, if no one knows who died first, the youngest is presumed to survive the elder.

If both joint-tenant owners have wills providing similar distributions --as is often the case with spouses--this may not be a concern.

On the other hand, if the joint tenants have different beneficiaries named in their wills, then the joint tenancy creates a lottery. For example, supposing a mother and daughter own real estate as joint tenants. The mother's will provides that her is to be divided among her three children, with a provision that if a child dies first, that child's share goes to his or her own children. In the daughter's will, she leaves everything to her husband. If the mother dies first, or it is uncertain who died first, the real estate will go to the daughter's husband pursuant to the daughter's will. If the mother outlives the daughter for a short period of time, the real estate will fall into the mother's estate, and each of her surviving children will get one-third, and one-third will be divided among the daughter's children. This is one of the reasons I am not a fan of using joint tenancies or joint bank accounts as an estate planning tool between to transfer wealth from parents to their children.

The Succession Law Reform Project Committee in its report, Wills, Estates and Succession: A Modern Legal Framework, has proposed a change in British Columbia's legislation that would provide that in the case of a joint tenancy, if all of the joint tenants die at the same time or within five days of each other, they will be treated as though they owned the property as tenants in common. This means that the interests in the property will be divided between or among the estates of the joint tenants instead of the whole interest in the property going to the survivor.

If the law were changed as the Succession Law Reform Project Committee has proposed, then in our example, a half-interest in the property would go to the beneficiaries of the mother's will, and the other half would go to the daughter's husband under the daughter's will. This is probably a fairer result, and eliminates the lottery.

I like this recommendation.