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Tuesday, October 9, 2012

House in the wife's name only - what if she passes away?

Most married couples own their homes as joint tenants, so that if one of them passes away, the other one automatically owns the home. This arrangement helps to give assurance that the surviving spouse and the family's children will legally and financially be able to continue living in the home.

But there are sometimes reasons why couples set up other arrangements. Often those reasons are related to finances or poor credit, but it could also be to avoid unwanted legal consequences or to protect assets from potential creditors. Not owning the home jointly may be the best arrangement available for a particular couple, but it tends to leave them wondering about who would own what should one of them pass away.

A reader left me this question about their home:

"After being married for almost 3 years, husband and wife put down payment together to purchase a house, but the title of the house is only under the wife's name. What will happen if the husband or wife pass away during marriage?"

If the husband passes away first, really nothing is going to happen about the house, as he doesn't own it. If the wife should pass away first, the answer could be much more complicated. Here are some of the factors that would be taken into consideration when dealing with the home:

Did the wife leave a will? If so, the will should address the question of what is to happen with the home. She might have left a will leaving the house directly to her husband. More likely, she may have left a will leaving her entire estate to her husband. If she has left the entire estate to him, that will of course include the house. Her will might also have done something entirely different, such as putting the house into a trust for their children, or directing that it be sold. The will should also address the household and personal items in the home.

Does the couple live in a province with Dower rights (such as Alberta)? If so, the Dower Act states that on the passing of the wife, the husband would have the right to live in the house for the rest of his life. He would always have a roof over his head, but he would not be able to sell or mortgage the house as he would not own it.

Who else is in the picture? In the absence of a will, the husband would receive whatever the law of the province of residence says he will receive from his wife's estate. He may have to share with the family's children and/or with any children the wife had in a previous relationship. Intestacy laws tend to work on fractions as opposed to specific assets, and would not necessarily include or exclude the home from the husband's share.

Is the husband adquately provided for, either by the wife's will, or by intestacy law? All across Canada, surviving spouses have the right to claim a larger portion of an estate if they have not been properly provided for. This is true whether or not the deceased spouse left a valid will behind. The husband might launch a claim of this sort and through that receive the house. Again, this might depend on who else is in the picture with competing claims.

Does the wife have a lot of debt? Depending on the type and amount of debt, the house might have to be sold to pay the wife's liabilities. Debts and taxes must be paid before any beneficiaries receive anything from the estate, even if that means selling the home.

Is the husband in bankruptcy? If so, his inheritance, including the house, may be seized by the receiver and used to satisfy his debts.

As you can see, nothing good is going to happen without some effort by the wife to protect her husband in the event of her death. She should prepare a will that sets out her intentions for the house. She should also speak with an estate-planning lawyer in her province who can inform her more specifically about her options and consequences.


18 comments:

  1. Thank you for posting this article. These are important tips to know when about to buy a home. My husband and I are joined tenants. I love this because if a tragedy ever does occur I know that I will still have a place to live with my name on it. The estate lawyers in vancouver can help you make the decision on what you want to do when putting a payment down on a house. Thanks agian.

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    1. You're very welcome Dorthy. Thanks for your comments about the lawyers - that is exactly the role a lawyer should play. It should be someone to pass on legal information and give you the benefit of his/her experience to help you set up your legal arrangements to avoid problems.

      Lynne

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  2. Married, no children, husband has an adult child. No relationship with her, my name isn't on house, he also has business debts. If he passes before I and he doesn't have a will. What happens to house do I have to sell To pay off his debt??

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    1. The answer to this question is going to rely in large part on which province you two live in. This is because the marital home is treated differently than other assets. For example, if you lived in NL, the house would automatically be considered to be jointly owned and it would transfer to you regardless of debts. If you live in AB, you would automatically have a right to live in the home for the rest of your life. In Ontario, you'd automatically be entitled to live in the house for 60 days after his death, then you'd have to go through the equalization of assets formula to see what you'd have.

      Lynne

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  3. this opens up what if husband name on house, but I pay the full mortgage or we share the mortgage payment, and financial rights? if he dies first, or that doesn't matter either? thank you for your post, will see an estate planner to be sure we are protected.

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    1. It's definitely a good idea to see an estate planner. People get pretty upset when they realize that land titles registries are only concerned with ownership of land, and not who might "really" own it because of who made payments.It's really essential to have everyone's rights set out and protected legally, and not to rely on unwritten, informal arrangements that will give you no legal help whatsoever.

      Lynne

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  4. Mrs Buttler, I have a question not really concerning a will but it's somewhat related to this topic: I have some unpaid debts, and we are planning to buy a house. If the house is solely under her name, can the creditors come after the house ?

    Thank you.

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    1. I assume that when you say "her name" you mean your wife. No, creditors cannot take someone else's property to satisfy your debt. If the house goes into joint names, that's a different story.

      Lynne

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  5. Hi Ms Lynne,thank for your post its help me to know the law,but i would like to ask for some question if you dont mind,about the right of wife,we got married 2015,and bring me here in Canada,but suddenly we are not good in situation,and I don't know what to do,I have no one family in this country except my husband who bring me here,thank you

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    1. Everyone is welcome to ask questions here. However, I don't do family law and I don't answer questions about divorce, child custody, etc. I stick to what I know, which is wills-related. I welcome your questions on those topics.

      Lynne

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  6. Hi Lynn. In BC, to what is the surviving spouse entitled regarding the marital home(in the deceased spouse's name)if the deceased spouse has left it to his/her adult children?

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  7. I have a question. Me and my husband own a house. We put his parents name in mortgage support only for 1 Year. We are having renewal soon. My husband now told me that he would not take out his parents name property is 48 percent in parents name and 52 percent our name what should I do? I do not want his parents name on our property because he has one sister so she can stand anytime for her share. But in reality it is only my and my husband income spent on this. This is the only property we have together and we have one son. They all are mentally harassing me that they won't take out their name. What should I do?

    ReplyDelete
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    1. There's not much you can do. It's all very well to talk about "putting a name on" property but in reality, adding a name creates legal ownership rights for the person added. You can't just take away a house a person owns. It doesn't matter that's it's "really" yours because the title of the house says that they own 48%. It was a mistake that you and your husband have to live with until everyone agrees to change the title again.

      Lynne

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  8. Question: Both parents lived in same home but house was put into my morher's name because dad had a gambling habit. Now that my mother has passed, how do I go about putting my parent's home back into my father's name? She had a will that states everything goes to my dad. But do I have to have Grant of probate or can I fill out the necessary paperwork to do this?

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    1. If the house was in her name only, you are going to have to go through probate. If this is the only asset and the estate is not complex, look for a DIY kit that you can use. Self-Counsel Press has kits for Alberta, BC and Ontario. I have one for NL available on this blog. Other than those provinces, I'm not sure if there's a kit out there.

      Lynne

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  9. A Question: My father, in Ontario, died six months ago. He had no will. The house was in his name only. His wife has nothing but contempt for my adult siblings and me. We were very close to our father, however. We are in BC. The house is really his only asset. Does his wife have claim to all of it? We've heard nothing from her or anyone else. Thank you.

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  10. I bought a house on my own with my kids. My boyfriend at the time decided to live with me...but did not contribute to downpayment...a few months later...we got married...he helped with some bills but not the mortgage. Only my name is on the house. I am still the only one paying the moetgage and insurance...if anything happens to me or ww divorce...are my children entitled to my house oe can he kick them out as they are from my previous marriage

    ReplyDelete
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    1. It depends on which province you live in. The laws are surprisingly different from one province to another. In my province (NL) for example, it doesn't matter whose name is on the home if a married couple lived there. In that case it goes to the surviving spouse. This is not the case everywhere. In my book, "No Nonsense, real life guide to estate planning in Canada" I included a chapter on what happens to the matrimonial home in every province and territory.

      Lynne

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