No takesies backsies!
- I share lesson-teaching court case where joint tenancy was used as an estate planning tool but the home owner changed his mind. The court case teaches the lesson that a legally given gift cannot be taken back. It also points strongly in the direction of using a will as an estate planning tool, because you can change your will any time you change your mind about beneficiaries.
There are no “takesies backsies” in law.
An elderly Kelowna man learned this lesson the hard way.
His story also serves as a warning against mucking around to avoid probate.
Mr. Rockwater has a son and a daughter.
He separated from their mother when they were young and saw very little of them when they were growing up.
His daughter says he had been abusive to their mother and angry about the separation. She says she was raised in poverty in part because of Mr. Rockwater’s refusal to pay child support.
Ironic, and arguably fitting, that Mr. Rockwater failed when he fought to reverse a legal transaction that resulted in his daughter owning 50% of his home.
And fight he did.
I shudder to think of the legal dollars he spent losing the initial court case.
And then losing the appeal.
Adding insult to injury, he was required to compensate his daughter for legal expense she incurred defending the case.
Mr. Rockwater’s daughter had reached out from time to time to try to establish a relationship with him. She described a pattern of him being emotionally warm and then cold.
When reaching out in late 2020, his daughter found among his papers a copy of an unregistered document transferring title of his home to his son. She says she told him to consult a lawyer about that, but he responded that “he had spent enough on lawyers.”
Again, how ironic.
Instead, he consulted with a notary and signed paperwork utilizing “joint tenancy”, a very common estate planning tool, resulting in the daughter being added to the title of Mr. Rockwater’s home as a “joint tenant”.
I put those terms in quote because they’re legal terms, the significance of which are often misunderstood.
Last fall, I wrote a three-column series explaining joint tenancy. Let me know if you have difficulty finding them and I’ll send you links.
In my series, I explain three types of joint tenancy.
With two of the three, Mr. Rockwater’s daughter would have had no controlling interest in the property while he was alive.
The notary, on Mr. Rockwater’s written instructions, implemented the third type of joint tenancy, the one I labelled “Shared Ownership with Survivorship”.
The result was Mr. Rockwater giving a gift of 50% of his home to his daughter, which she could do with as she pleased while Mr. Rockwater was still alive.
The transaction was registered on December 10th, 2020.
On December 21st, 2020, Mr. Rockwater contacted the notary asking for the transfer to be unwound.
Mr. Rockwater’s evidence was:
- he was reassured he would be able to stay in his home until he died and didn’t have to worry about ever losing his home, and
- he was told his daughter would get one-half of the home on his death.
That evidence didn’t fit with the contents of the notary’s file.
The file included Mr. Rockwater’s written acknowledgement that he read and understood the contents of a letter that explained the legal implications.
The court found no evidence that Mr. Rockwater’s cognitive capacity was lacking or that his daughter had exerted “undue influence” on him.
It would seem that Mr. Rockwater simply had a change of heart.
In the words of the Honourable Justice Griffin of our Court of Appeal: “…the law does not give him a remedy for changing his mind”.
Fortunately for Mr. Rockwater, his daughter’s stated intention at the time of the appeal was not to do anything that would cause him to have to move from his home.
And I see that Mr. Rockwater and his daughter continue to be registered owners of the property, though the joint tenancy has been “severed” meaning that when Mr. Rockwater dies his 50% will pass to his beneficiaries under his will instead of to his daughter.
Mr. Rockwater would have saved himself a whackload of money and stress had he gone the simple route of using a will, instead of joint tenancy, as his estate planning tool.
The nice thing about a will is that you can change your mind about your beneficiaries, and change your will, as often as you wish.
Please note that I got the facts of this column from publicly available court decisions. I used the fictional name of Mr. Rockwater to avoid unnecessary embarrassment.
