Fill This Form To Receive Instant Help
Homework answers / question archive / Step 1
Step 1. Consider the following scenario. Answer the questions that follow:
Alice, Billy, and Charlie decide to purchase a commercial real estate property, which they intend to own and manage as business partners. When asked by the seller how they want the deed conveyed to them, Alice, Billy, and Charlie tell the seller that they want to own the property as "joint tenants." The deed is so prepared and reads as follows: O to Alice, Billy, and Charlie as joint tenants. After the partners have successfully operated the commercial property for 15 years, Charlie dies. Alice and Billy assume that because the deed has named them as "joint tenants" they will succeed to Charlie's ownership interest in the property. However, when Charlie's will is probated, the executor of Charlie's estate determines that Charlie's spouse and sole beneficiary under the will are entitled to Charlie's interest in the property.
Answer:
1. If Alice and Billy challenge the decision by the executor in court, will they prevail?
Challenging the executor in court will prevail in favor of Alice and Billy. Primarily, the as joint tenants, it is required that all parties agree on the terms and conditions of the tenancy. In essence, in matters relating to succession, it must be determined prior on the procedure to undertake relating to the shares of the deceased partner. In essence, all decisions arrived at in terms of a joint tenancy have to be agreed upon by all members of the joint tenancy. Therefore, the decision to have Charles' wife as the sole beneficiary would be misplaced and prone to be challenged in court. The nature of a joint tenancy thus requires that all members of a joint tenancy are in agreement of the process of succession. In the long term, Alice and Billy will prevail against the executor.
2. What factors should the court consider in deciding who should succeed in Charlie's interest?
In the determination of who should succeed in Charlie's interest, the terms and conditions of the joint tenancy have to be looked into thoroughly. Primarily, the factors leading to the joint tenancy should be the guiding factor.
The clauses touching on the succession of the shares upon the demise of a member or when a member seeks to leave the joint tenancy will be at the core focus of the court. The directions given in the joint tenancy agreement hence will be the main factor that will be considered in deciding who should succeed in Charlie's interest.
3. What weight should be given to each of those factors?
The joint tenancy agreement will be the main factor that will be considered in terms of the succession of shares. Essentially, it should be the only factor to be considered as the decision should not be based on an individual perspective.
On the minor side, the decision by the other members of the agreement should also be prioritized as the final decision is bound to impact on the performance of the joint tenancy.