Simultaneous Deaths with Joint Tenancy or in a Revocable Living Trust

In the estate planning legal field, almost every discussion with our clients centers around the subject of death. The entire point of estate planning is ensuring you can create generational wealth beyond your life, so death is inherent in the field. This post is on a related cheery subject – simultaneous deaths. If you're holding title with your spouse, then the chances of you two being together most of the time is probably high. What if there is a car accident, a fire, or some other tragedy and a married couple or co-owners of real estate are together? What happens if co-owners of a property in joint tenancy die at the same time? What if there was a trust?

Joint Tenancy, Community Property and Quasi-Community Property

The answer is two-fold, but first we need to determine who died first and how far apart were the deaths (as in whether they were truly simultaneous). If one person survives the other by at least 120 hours, or 5 days, then the second person to pass will be considered the survivor and thus the sole owner of jointly held property under at law. This is for property held as community or quasi-community property between spouses, as well as property held in joint tenancy with a right of survivorship (something I've talked about many times on this channel).

However, if the parties both died within that 120 hour or 5-day window, then there is no "survivor" at law and thus each co-owner's respective estates "retain" the property and their respective heirs inherit their interests in the property, effectively acting as if the property was held as tenants in common, rather than joint tenancy meaning potentially two (2) probate cases and all the headaches that follow. This is all according to the Uniform Simultaneous Death Act and again, is only relevant where property is held by individuals, rather than in a trust.

Joint Living Trust

What to do with a trust after a spouse passes away is a topic we'll cover shortly in its own post, so here we'll simply focus on property held in a joint trust. The short answer as to what to do when there is a simultaneous death of the trustors, the parties who set up the trust initially, is to look at what the trust says. A good trust is going to consider any potential outcomes, including where there has been a simultaneous death of the trustors. If we're talking about a typical revocable living trust between spouses, then the trust is likely going to treat a simultaneous death of the trustors the same as deaths in an unknown order and the death of the second spouse to die and that is to simply distribute the trust estate as those trustors designated when they created the trust in the first place, such as equally between their two children.

The main situations where things may become a bit more complicated are where there are distributions upon the death of the first spouse to pass or where the trust estate is to be split following the death of one of the spouses – something typically done for estate tax reasons. However, even then, a well written trust will account for such a situation and lay out what should happen, usually following the same 120 hour or 5-day rule.

Where the trust requires a distribution upon the death of one of the spouses but there is a simultaneous death, then the trust will say how the distribution is to be done, typically by simply copying the distributions already outlined in the trust for the death of the first spouse, then the death of the second. Often times, the clause on simultaneous death will simply point to the distribution plan laid out else ware and simply say to do that one.

Finally, if the trust provides for a splitting of the estate into two trusts, again, a well drafted trust will lay out what to do in a simultaneous death scenario. However, generally, either one of two outcomes will occur. Either the trust will say to simply keep the estate as one (if estate taxes won't be an issue) and distribute the trust estate in the same manner designated for the death of the second spouse. Alternatively, the trust may still require a splitting of the trust estate into two separate trusts (if estate taxes need to be minimized), and then distribute each trust as the trustors designed when they created the trust to begin with.

To close with a quick note. Please be aware that this was all in the case of a simultaneous death of the trustors - the parties who created the trust to begin with. If there are multiple trustees, and they die, resign, or are removed simultaneously, then we again look to what the trust says, which will likely be to have the next person or persons in line stepping in as trustees. These will be people designated by the trustors when creating the trust initially. We'll cover trustee succession in its own post, however.

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