I’m sure many of you have run into this situation and how uncomfortable it can be: It is the day of closing, you show up at the attorney’s office, and the seller is asked “Are you married?”
The answer is yes, and the seller is informed that their spouse will need to sign the deed.
More often than not the seller’s response is, “It’s my property! Why does my spouse need to sign the Deed?”
Knowing the reasons behind this requirement may help to ease this uncomfortable situation or prevent it all together.
Oftentimes, the seller acquired their property before marriage, by gift or the property was inherited.
The reasons that the seller may not want their spouse to sign can vary from simple inconvenience to not wanting an estranged spouse to know what the seller is doing. Whatever the reason, there are Marital Rights that must be dealt with before the property can be conveyed free and clear of all encumbrances.
What are the Marital Rights and where do they come from?
The Marital Right is found in N.C General Statute § 29-30 which reads, in part: (a) In lieu of the intestate share provided in G.S. 29 14 or G.S. 29 21, or of the elective share provided in G.S. 30 3.1, the surviving spouse of an intestate or the surviving spouse who has petitioned for an elective share shall be entitled to take as his or her intestate share or elective share a life estate in one third in value of all the real estate of which the deceased spouse was seized and possessed of an estate of inheritance at any time during coverture.
In short, what this statute is saying is that upon the death of the owner spouse, a non-owner spouse has the right to elect to take a one-third life estate in all real property owned by a deceased spouse at any time during the marriage instead of other property the non-owner spouse could have received by way of will, intestate succession or dissent from the will.
This is regardless of the fact that the deceased spouse has long since conveyed the real property to another.
Upon election by the non-owner spouse, real property owned at death or previously conveyed would be subject to a one-third life estate of the non-owner spouse. The right in legal terms is called an inchoate interest, meaning that it is only a potential interest, and it arises from a time when the law wanted to protect a wife from essentially being disinherited by a husband conveying away all of his real property before death.
The non-owner spouse does not have any possessory right in the property until the owner spouse dies and the surviving non-owner spouse makes the election under the statute.
It is very rare that the right would ever be exercised. However, North Carolina case law makes it clear that even though the right may never be exercised it acts as an encumbrance on the real property preventing marketable title from being conveyed.
So how do you get rid of this Marital Interest?
You guessed it: by having the non-owner spouse join in the conveyance Deed.
There are other ways for the non-owner spouse to waive the Marital Interest as well
- A Marital Release signed by the non-owner spouse.
- A Separation Agreement signed by both husband and wife.
- Free Trader Agreement
In any event, the waiver can only be by clear consent of the non-owner spouse and as always with real estate, “an ounce of prevention is worth a pound of cure.”
Be sure to let your sellers know if they are married, that the Marital Interest will need to be addressed before the property can be conveyed.
Remember, if you need legal advice with wills, trusts, estates, or marital and domestic law, Hutchens Law Firm has over 30 attorneys on staff and can assist you.
Published by J. Chris Huff on October 15, 2015