Alabama Supreme Court Weighs in on Joint Tenancy with Right of Survivorship

On Friday, April 7, 2023, the Alabama Supreme Court issued an opinion in a case that centered on severing survivorship between joint tenants. In sum, the court held that the execution of a real estate sales contract operates to sever the joint tenancy with the right of survivorship (JTWRS) between the owners (sellers) of the property.

In this case, three people owned a parcel as JTWRS and signed a contract to sell the real property. Before closing, one of the owners died, and the survivors claimed the entire sales proceeds. The devisee, under the decedent’s last will and testament, claimed a 1/3 interest in the proceeds. The trial court granted summary judgment in favor of the surviving grantees. The Supreme Court, however, held that the joint tenancy was severed by the execution of the contract and ordered 1/3 of the proceeds to the devisee. The ruling was issued by a panel of 5 justices (all concurring, none dissenting), and it further averred that a sales contract severs the JTWRS whether the sale closes or not. An application for rehearing has been submitted, but there is no news on whether that will be granted.

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