Opinion ID: 2364278
Heading Depth: 2
Heading Rank: 4

Heading: Precedent Characterizing Real Estate Held in Joint Tenancy

Text: [¶ 13] To determine which rule is appropriate, we examine the rules that we have applied in the past for determining marital and nonmarital property. Most of the cases have involved real estate. In Tibbetts v. Tibbetts, 406 A.2d 70 (Me.1979), we adopted the source of funds rule for real estate in joint tenancy acquired after marriage with funds that came, at least in part, from one spouse's separate property. Id. at 75. The source of funds rule traces the contribution of funds and sets apart, as nonmarital property, a portion of property in joint tenancy in proportion to the contribution of the nonmarital funds to the acquisition of the property. [¶ 14] In Carter v. Carter, 419 A.2d 1018 (Me.1980), we adopted the transmutation doctrine and said that when one spouse transferred title of real estate from sole ownership into joint ownership with the spouse, the transfer evidenced the spouse's intent to gift the property to the marital estate. Id. at 1022. Carter established a presumption that real estate transferred into joint tenancy was marital, and the presumption could be rebutted by clear and convincing evidence that it was not the transferring spouse's intent to place the property in the marital estate. We rejected the husband's argument that the transfer evidenced an intent to avoid probate rather than an intent to give the property to the marital estate. [3] [¶ 15] In Lalime v. Lalime, 629 A.2d 59, 60-61 (Me.1993) and Weeks v. Weeks, 650 A.2d 945, 947 (Me.1994), we applied Carter to real estate originally owned by the husbands but placed in joint tenancy for the purpose of obtaining a loan. We said that such a purpose was not evidence that they did not intend to transfer the property to the marital estate. The husbands explained their reasons for the transfers, but they did not deny the transfers. We further noted that retrospective statements of intention offered at the time of divorce to defeat the other spouse's interest are highly suspect. Lalime, 629 A.2d at 61 (quoting Carter, 419 A.2d at 1021-22 n. 3). Lalime and Weeks clarified the dicta in Carter that to overcome the presumption of donative intent, the transferring spouse had to prove by clear and convincing evidence that the spouse did not intend to transfer ownership or the transfer was induced by fraud, coercion, duress, or deception. Lalime, 629 A.2d at 61 n. 1; Weeks, 650 A.2d at 947. [¶ 16] In Long, we applied the transmutation doctrine from Carter and Lalime, Long, 1997 ME 171, ¶¶ 5, 15-18, 697 A.2d at 1320, 1323-24. We held that when real estate owned by one spouse before the marriage was placed into joint title by that spouse, the real estate was marital, and the motivation of the spouse in transferring title was irrelevant. [R]eal property acquired jointly during marriage, whether transferred from a spouse or a third party, becomes a part of the marital estate. Id. ¶ 15, 697 A.2d at 1323. We held that the concept of the joint enterprise of marriage, as embodied in the statutes, required recognition of the legal significance of joint ownership. Id. ¶ 17, 697 A.2d at 1324. We stated: A deed in joint tenancy creates present ownership rights that are capable of immediate transfer. It is incongruous to conclude that such an outright transfer of ownership to a spouse fails to create divisible marital property in the event of divorce. Id. ¶ 16, 697 A.2d at 1323. We added that under the Long rule we were advancing the statutory purpose of subjecting shared assets to the court's equitable powers of division. Id. ¶ 17, 697 A.2d at 1324. We expressly overruled Tibbetts and the line of cases that treated jointly owned real property as separate property. Id. ¶ 16, 697 A.2d at 1324. [¶ 17] In Long, we noted the inconsistent treatment that had been given in our past decisions to jointly-owned property. Id. ¶ 15, 697 A.2d at 1323. Long, however, is not without its own ambiguity. It is possible to interpret the rule in Long as an absolute one: if real estate is jointly owned, it is marital. This is because of the statement in Long that the inconsistency in prior cases resulted from focusing on the presumed intent of the parties rather than the objective facts of joint ownership, and the statement that the motivation for transferring the property into joint tenancy is irrelevant. Id., 697 A.2d at 1323. These two statements in Long appear to disavow any presumption. However, the latter sentence is followed by a citation to Carter, Lalime, and Weeks, with a footnote stating that the presumption that the property is marital could be overcome only with clear and convincing evidence that the transferring spouse did not intend to transfer the property to joint ownership or was induced to do so by fraud, coercion, duress, or deception. Id. ¶ 15 n. 3, 697 A.2d at 1323. [¶ 18] We now explain Long to mean that when real estate is held in joint tenancy there is a presumption that it is marital. The presumption is rebuttable but on very narrow grounds. The presumption can be rebutted only if the spouse did not intend to transfer the property to joint ownership or the spouse was induced by fraud, coercion, duress, or deception. Furthermore, the presumption can be rebutted only with clear and convincing evidence. The presumption of donative intent in Carter, Lalime, and Weeks is not applicable after Long. The presumption from Long is that the property is presumed marital.