Like anyone else, lawyers can occasionally make mistakes. In a recent issue heard by the Ontario Superior Court of Justice, a lawyer’s failure to register their client’s severance of joint tenancy in a matrimonial home before the client’s death was challenged by her common-law partner as reason enough to dismiss the severance. It was up to the court to determine whether or not the severance could stand.
A “Zombie Transfer” Severing Joint Tenancy
The deceased and the plaintiff were in a relationship from 2008 until their marriage in 2014. Each of them had children from previous relationships. They purchased a home together in 2016 and were registered as joint tenants, meaning if one of them was to pass away, the other would inherit their interest in the home.
The deceased was admitted to the hospital in 2016 due to medical complications. She remained in the hospital until her unexpected death on April 15, 2017.
While the deceased was in the hospital, she got into an argument with the plaintiff and decided she wanted to divorce him. Accordingly, she asked her lawyer to draft her a new will in which she planned to leave her estate to her three children instead of to the plaintiff. She also made it clear that she wanted to sever the joint tenancy on the matrimonial home so that her share would go to the children instead of to the plaintiff.
The document to terminate the joint tenancy was placed into a file with the new will, but the lawyers had not yet registered the document severing the joint tenancy when the deceased unexpectedly passed away. Upon learning of this mistake one of the lawyers representing the deceased went ahead and registered the transfer anyhow, without saying a word about their client having died. This is known as a “zombie” deed/transfer. These types of transfers are invalid and it would have been rejected had it been discovered.
The Deceased’s Intent Should Not Suffer Due to Lawyer Error
The children and the plaintiff agreed to sell the home, so the only outstanding question concerned who would receive the deceased’s share of the proceeds from the sale. The plaintiff argued that since the severance had been registered improperly, he should collect all of the proceeds from the sale of the home. The deceased’s children argued that their mother’s intentions were clear and that she did all she could to ensure the proper legal process was followed, and that it was her lawyers who made a mistake and tried to cover it up by deceiving the government when registering the severance.
Through an examination of case law, the court referenced previous cases where the party intending to register a severance did all they could do to execute it in a timely manner, but their lawyer failed to comply with necessary deadlines. In one case, the court wrote, “The fact that the transfer was not registered in a timely way through a lawyer’s inadvertence is not within the control of the applicant. The respondent bank should not benefit gratuitously as a result of the lawyer’s error.”
In this case, the court agreed that the deceased had “the clear intention to sever the joint tenancy immediately and unconditionally” and expected her lawyers to act accordingly. As a result, the severance was treated as registered despite the lawyers’ actions.
Contact the experienced estate lawyers Derfel Estate Law to get help with any issues concerning an estate or will challenge. We will ensure that your rights and interests are protected, and work with you to achieve the best possible resolution in your estate litigation matter. Call us at 1-844-2-DERFEL or contact us online to schedule a consultation.