In a recent decision from the 10th Circuit, the court held that the bankruptcy estate’s interest in joint tenancy property terminated upon debtor’s death. When the Chapter 7 debtor died post-petition, the case continued under Bankruptcy Rule 1016 but the bankruptcy estate’s interest in jointly owned property owned by the debtor and his non-filing wife in joint tenancy terminated. As a result, the non-filing spouses becomes the sole owner of the property.
Under Colorado law, when a joint tenant dies, his or her interest in the property is terminated, and the surviving joint tenant’s interest in the property continues free of the deceased joint tenant’s interest. Moreover, Colorado law expressly provides that the filing of a bankruptcy petition does not sever a joint tenancy.
In re Chernushin, 584 B.R. 567 (D. Colo., Jan. 26, 2018), aff’d, — F.3d —-, 2018 WL 6729716 (10th Cir., Dec. 21, 2018)