Legal Question in Real Estate Law in California

Re: divorce and deed concern

Your facts are a little hard to follow because some of them seem to be presented out of time sequence. I think I have figured out your problem. The divorce settlement specified that the joint tenancy was to be severed, but due to attorney oversight, the deed to accomplish this was never prepared, much less signed or recorded.

Your facts don't include anything about who got the proceeds of sale, bit I assume you got 100% since other facts regarding the sale suggest that you were regarded as the sole owner at the time.

This leads me to wonder why you would think the capital gains tax should be divided between the estate and you, when all the facts point to you being the party that garnered the gains.

I suppose it's possible that a court order to re-title a property from joint tenancy to a tenancy in common could be construed as sufficient in itself to sever the joint tenancy (I don't know the answer to this and I would have to research it), but if it did, and you were thus not the sole owner but only a half owner, you'd bear only half the gains tax burden but you would have to reimburse the estate for its share of the sale proceeds.

So, in sum, I don't know the legal or the tax consequences of the facts presented, but it's hard for me to imagine a scenario that treats you as entitled to 100% of the sale proceeds but only 50% of the tax burden. My advice would be to consult a tax expert. If it turns out that you have incurred a loss (which I doubt) due to the attorney's failure to record a deed, you might consider a malpractice action.

Re: divorce and deed concern

Title does not "get changed" until a deed memorializing that change is recorded, regardless of what any judgment in dissolution states. Did you sign one? Did your ex? If not, was your attorney supposed to prepare one? As you got a greater interest athan you would have received had the deed placing you and your ex on title as tenants in common been recorded, how have you been damaged? Why did the trustee in your ex's trust not take some action? Also, as your ex's half gets a "stepped-up" basis at time of his death as to his half ownerhsip, there cannot be MORE capital gains owing than there would have been had the deed been prepared, so I don't follow what your beef is.

Re: divorce and deed concern

You did not state whether the marriage had been disolved before the time of his death. If he died prior to the dissolution then the case would have ended upon his death. You should consult either with your family law attorney or retain an attorney to assist you in this matter.