Update your documents when you update your life

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In 1968, David and Sharon Johnston bought a house in Vancouver for $37,000.00. They purchased it as tenants in common, which meant that they each owned a 50% share that would fall to their estates on their deaths. A few years later, they separated and David moved out; they never divorced, and Sharon never bought David’s share of the house.

Some time later, Sharon met Ezra Lucas, with whom she remained in a relationship for the rest of her life, including raising a son together. Sharon paid the full mortgage on the house from the time she and David separated until her death in 2009.

At the time of her death, Sharon left her share of the house to her son, Philip Lucas; by that time, it was worth $1.2 million. After David learned of her death in 2012, he petitioned the court to have the house sold and the profits divided between him and Philip. Philip contested this, saying that his mother had a verbal agreement with David that he would not claim any right to the house as long as he did not have to pay spousal support.

Ultimately, the court sided with David, confirming that Sharon had to take some positive action to either reduce that agreement to writing or remove David from title. Philip was credited with the amount of the mortgage payments over the years out of David’s share, but David was entitled to the remainder.

Some may view this as tragic, or grossly unfair. However, it is, in my opinion, a classic example of assuming the law is one way and taking no steps to investigate whether it is different from what you think. I see this happen all the time – someone has researched on Google, or talked to a friend, and just assumed that the information is correct and applicable to where they live. The law is harsh if you plan to go by the default rules, and there are no exceptions to those rules after you die. Sharon Johnston had many, many years to either have a written separation agreement or remove David from title; she never did, assuming that the law would work in her favour based on what she believed it to be. She was wrong about her interpretation of the law, and ultimately, that’s her own fault for not getting advice from someone who could have told her otherwise. It’s cruel, but in a way it’s actually fair. If you want to protect yourself, when your life changes, get advice to make sure that your documents are properly changed too.

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