Legal Question in Real Estate Law in California

divorce and deed concern

In my divorce settlement the title on our house got changed from joint tenancy w/rights of survivorship to tenants in common. Ex died and his trust took over his financial affairs. No deed regarding this change was ever filed with the county or for that matter was one signed by me or him changing title. When the house sold, I signed the affadavit of death and became sole owner. I realize jtwros trumps all other concerns and for that matter am the only one who signed the grant deed to the buyer. The trustee and name of trust signed a quitclaim to the buyer. Is it possible that the severance of title was not done correctly? Should the lawyer have made sure that this deed got created, signed and recorded so that both parties would carry the tax burden?

Thank you


Asked on 6/16/06, 3:31 am

3 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: divorce and deed concern

Your facts are a little hard to follow because some of them seem to be presented out of time sequence. I think I have figured out your problem. The divorce settlement specified that the joint tenancy was to be severed, but due to attorney oversight, the deed to accomplish this was never prepared, much less signed or recorded.

Your facts don't include anything about who got the proceeds of sale, bit I assume you got 100% since other facts regarding the sale suggest that you were regarded as the sole owner at the time.

This leads me to wonder why you would think the capital gains tax should be divided between the estate and you, when all the facts point to you being the party that garnered the gains.

I suppose it's possible that a court order to re-title a property from joint tenancy to a tenancy in common could be construed as sufficient in itself to sever the joint tenancy (I don't know the answer to this and I would have to research it), but if it did, and you were thus not the sole owner but only a half owner, you'd bear only half the gains tax burden but you would have to reimburse the estate for its share of the sale proceeds.

So, in sum, I don't know the legal or the tax consequences of the facts presented, but it's hard for me to imagine a scenario that treats you as entitled to 100% of the sale proceeds but only 50% of the tax burden. My advice would be to consult a tax expert. If it turns out that you have incurred a loss (which I doubt) due to the attorney's failure to record a deed, you might consider a malpractice action.

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Answered on 6/16/06, 12:01 pm
Judith Deming Deming & Associates

Re: divorce and deed concern

Title does not "get changed" until a deed memorializing that change is recorded, regardless of what any judgment in dissolution states. Did you sign one? Did your ex? If not, was your attorney supposed to prepare one? As you got a greater interest athan you would have received had the deed placing you and your ex on title as tenants in common been recorded, how have you been damaged? Why did the trustee in your ex's trust not take some action? Also, as your ex's half gets a "stepped-up" basis at time of his death as to his half ownerhsip, there cannot be MORE capital gains owing than there would have been had the deed been prepared, so I don't follow what your beef is.

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Answered on 6/18/06, 9:01 pm
Lyle Johnson Bedi and Johnson Attorneys at Law

Re: divorce and deed concern

You did not state whether the marriage had been disolved before the time of his death. If he died prior to the dissolution then the case would have ended upon his death. You should consult either with your family law attorney or retain an attorney to assist you in this matter.

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Answered on 6/17/06, 9:29 pm


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