Dower and Curtesy and the Unwilling Spouse
Did you know that asking your client's marital status is part of a Realtor's fiduciary duty in Kentucky? Neglecting to ask this simple question can not only create roadblocks and confusion in a closing, it can also create liability for you if a deal falls through because the spouse will not cooperate and he could have been properly joined in the transaction at the beginning.
Dower and curtesy rights exist by statute in Kentucky. They are inchoate (undeveloped) rights, and every spouse has them to their spouse's property. As soon as you say "I do" you have the right, if your spouse dies, to roughly one half of their property. There are ways around this (i.e. premarital agreements), but for in real estate transactions you always have to deal with it as if it's there.
Let's say you have a buyer that is going through divorce (or just wants to buy a property in her name alone) her spouse will need to sign a mortgage if the she wants to take out a loan to purchase the property. It's a good idea to have the spouse sign the contract just stating, "Sam joins this contract agreeing to waive and subordinate his curtesy interest to the said property at closing. Sam will sign all documents required to do this including a mortgage.” If Sam won't sign off on those terms, then Sam probably will not cooperate at closing and you are wasting your time.
If you are listing a property where only one spouse is on title, the other spouse should also sign the contract. Both spouses will need to sign the deed to transfer the property, so why not make sure that they are both legally bound to do so? Otherwise, you could have the spouse who isn't on title hold up the entire deal if he later refuses to sign.
Remember, trusts and incorporated entities such as an LLC don't require the signature of a spouse.
There are a few ways to get around the dower and curtesy rights, but every deal is different and it's up to the attorney, lender and type of loan to determine what is acceptable.
Here are some examples of when you will need a spouse to sign documents. This list is not exhaustive and you should always contact an attorney to confirm who will need to sign.
Sam purchased real estate in 2010. He married Sally in 2013. They are now listing their property with you. Have them both sign the documents. At closing she will only need to sign the deed and Sam will get the check at closing. He is the only one on title. She only has dower interest.
Sam purchased real estate in 2010. He married Sally in 2013. He and Sally divorced in 2015. Sam now wants to sell the property. Only Sam needs to sign. Sally was never put on title so she doesn’t need to sign anything.
Sam purchased real estate in 2010. He married Sally in 2013. They filed for divorce 2 months ago and already did a quitclaim deed taking Sally off the property. Sam now wants to sell the property. Sally will still need to sign the deed at closing. She is no longer on title, but still has dower interest until the divorce is final. Once the divorce is final only Sam will need to sign.
Sam and Sally were married in 2013 and they bought a house together (both on the deed) in 2014. They have filed divorce but it is not final. The will both need to come to closing to sell.
Sam and Sally were married in 2013. They bought a house together (both on the deed) in 2014. In 2015 they got divorced and it was finalized in January of 2016. The house was given to Sam in the settlement agreement. They never did a quitclaim deed. Sam wants to sell. Do a quitclaim deed prior to listing if possible so you only have to deal with Sally. If you can’t do that, Sally will have to sign deed and all other seller docs at closing because she is still on title.
Sam and Sally were married in 2013. They filed for divorce last week. Sam now wants to buy a house. If the closing will occur before the divorce is final (never trust that it will be finalized on time) Sally will need to sign the mortgage because she will have a dower interest until the divorce decree is ordered and signed by the judge. Sam can be on title (deed) by himself. (If he doesn't need a loan, then Sally doesn't have to sign anything.)
At the end of the day, it's always safest to call us and let us tell you who will need to do what.