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Q: I read your column about divorce automatically excluding an ex-spouse from inheriting a joint tenancy. From a practical point of view, what happens to the joint tenancy? How does a title company know about the divorce? J.G.J, Albuquerque

New Mexico law says that a divorce or annulment of a marriage "severs the interests of the former spouses in property held by them at the time of the divorce or annulment as joint tenants with the right of survivorship, transforming the interests of the former spouses into tenancies in common." A court order or contract relating to the division of marital property can override this law.

A similar law applies to decedents and killers. If you feloniously and intentionally kill someone with whom you hold property as a joint tenant, you do not inherit the whole property automatically as the surviving joint tenant (it would be bad public policy to allow such a result). Again, the interests of the decedent and killer transform into tenancies in common.

"Tenancy in common" means that two or more persons own an undivided interest in an asset. The interests can be equal or unequal percentages. Each tenant has the right to use and enjoy the entire property. Each tenant can will their share to whomever they want. When one tenant in common dies, that share only must be probated to pass to the heirs or devisees named in a will.

Many couples do new deeds to property when they divorce. One or the other spouse may end up with the house. However, if ex-spouses did not have a new deed prepared to their home held in joint tenancy, their interests in the home would convert to tenants in common. Each ex-spouse could then will their part of the property to their own heirs. For example, Juan and Eva marry, own their home as joint tenants, and then divorce. They do not prepare a new deed. Juan remarries Carla. Juan dies. His will leaves everything to Carla. Who owns the house now? Eva owns her half and Carla inherits Juan's half. This arrangement could prove awkward.

But what if Eva and Carla do not know about the New Mexico law? Eva, the surviving joint tenant, thinks the house is now solely hers. She sells it to an innocent, unknowing third party named Harry. New Mexico's law protects Harry if he bought the property "for value and in good faith reliance on" the joint tenancy title, unless some written evidence of the severance into tenants in common has been "noted, registered, filed or recorded" properly. The law also says payors or other third parties are not liable for making payments or transferring property to an ex-spouse beneficiary before the payor receives written notice of a divorce or annulment.

I hope divorcing couples, along with their attorneys, sort out the titles to property now to prevent future problems.



© 2002, Merri Rudd & Albuquerque Journal, All Rights Reserved