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Friday, August 6, 2010

Re-visiting the Dower Act - or, what happens to the family house

Because I get so many questions about what happens to the family house when one spouse passes away, I thought I'd touch on this subject again.

First of all, the Dower Act has been repealed in almost every province in Canada but is still in place (for now) in Alberta, so these comments only apply in Alberta.

The Dower Act gives certain property rights to married spouses. They do not apply to common law spouses.

When a married couple lives in a home that is only in the name of one spouse, and that spouse dies, the surviving spouse has the right to live in the house for the rest of his or her life. The surviving spouse does not own the house and does not have the right to sell or mortgage the house. It is simply a right to live there.

In estate planning, this sometimes affects couples who are in second marriages, because the spouse who owns the house may wish to leave the house to his or her children from the first marriage. He or she usually makes a Will to that effect, not realizing that the children can't get title to the house until the suriviving spouse passes away. That could be years later. This tends to disappoint the children, who have been told by their parent that they will inherit the house and weren't expecting to have to wait.

The basis for the Dower right is that only one spouse owns the house. None of this applies if both spouses have their names on the title.

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