Dower Act can change your plans

Yesterday I met with a client who was in his second marriage. Both he and his wife had children from their first marriages. They agreed verbally that each of them would leave their estates to their respective children.

Unfortunately we ran into a snag that might sound familiar to many people because the situation is not unusual. The client and his wife live in a home that is in his name only. They've always kept it in his name only because their plan is that when the husband passes away, the house will go to his children. The snag is the Dower Act of Alberta.

The Dower Act gives the wife the right to live in the house for the rest of her life. This right arises because they are legally married (the same right does not apply to common law couples) and they live in the house as their "matrimonial home". The husband suggested that in his Will, he would leave the house directly to his kids, thereby avoiding the Dower Act, but that would be ineffective. If he does leave it to his kids, they will only receive the property after her Dower Act rights expire (i.e. when she passes away). Until then they will have to wait.

A person is able to waive his or her rights under the Dower Act. Therefore if this couple really has agreed to the division of property that the client has described, then it would probably be a good idea for the wife to sign a waiver of her rights. In fact, the Dower Act has a regulation that sets out a form for doing so. If a waiver were to be signed, the husband could then make a Will leaving the house to his children.

When I advised the client of his position, he wasn't happy. He hadn't realized there would be a problem. However, I thought it was fortunate that he found out now that his plans wouldn't work, rather than his children finding out after he had passed away.