Overcoming the Presumption of Joint Title – Convenience Property

May 31, 2014 | Court Decisions, Legal Perspective

Icon for author Brian Vertz Brian Vertz

A Pennsylvania resident who is pursuing a divorce might be concerned about property that is titled in their name for the convenience of a family member, like an elderly parent or a child who has poor credit. A new decision of the Superior Court (unpublished) outlines a legal argument for keeping that property out of the hands of the estranged spouse.  In Werdenbaugh v. Werdenbaugh, No. 1306 MDA 2013 (May 29, 2013), the Superior Court reversed a lower court decision designating real estate titled in the name of a wife and her son as marital property.

The real estate was a home that was purchased while Husband and Wife were married, in the name of Wife and her son as joint tenants with rights of survivorship. Wife contributed $2,000 to the purchase and co-signed loans, which the son paid without contribution from Wife or Husband. Wife testified that she had to co-sign the loan because her son had bad credit, but she had no “ownership” rights to the property. The Master agreed that Wife’s son was the “equitable owner,” but designated Wife’s 50% interest as marital property.  The Fulton County trial court held that the Divorce Code is “title-blind,” and because the property was acquired during the marriage in her name (albeit jointly with her son), her 50% interest must be included in the marital estate. (Honestly, I would have drawn the same conclusion.)

On appeal, the Superior Court panel placed great emphasis upon the trial court’s credibility findings. Specifically, the appellate court observed that Wife’s testimony was found to be credible when she said that her name was on the deed for convenience purposes only. (Note: it is common for elderly parents to place bank accounts and real estate in joint names with their adult children as an estate-planning device.) The Court relied on case law dealing with jointly-titled bank accounts, holding that a presumption of joint title may be overcome by evidence that the parties did not intend joint ownership rights.

I wish that this case had underscored the evidentiary standard for overcoming the presumption of joint title.  It would seem that clear and convincing evidence would be necessary to prove that a jointly-titled property is held only for the convenience of one of the record owners. Yet, this case clearly demonstrates that it is possible to overcome the presumption and preserve the property of a family member whose interests should not be affected by a divorce.

Source: Superior Court of Pennsylvania, Werdenbaugh v. Werdenbaugh, No. 1306 MDA 2013 (May 29, 2013)(non-precedential)

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