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Source of Title Blog

Ohio Bill Introduced to Abolish Dower
by Robert Franco | 2017/12/10 |

Ohio is one of only a handful of states that still recognizes dower.  There has been talk about abolishing it for years, but nothing much has come of it until now.  On November 7, 2017, House Bill 407 was introduced and it is currently assigned to the Civil Justice Committee for hearings.  

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For those who are not familiar with dower in Ohio, it is an inchoate right providing that "a spouse who has not relinquished or been barred from it shall be endowed of an estate for life in one third of the real property of which the consort was seized as an estate of inheritance at any time during the marriage."  (see R.C. 2103.02).  Essentially, it gives non-title holding spouses an interest in all real estate owned by their other half.  Thus the non-title holding spouse must sign deeds, mortgages, and other grants, to release their dower interest - it cannot be separately released.  And, typically it can only be terminated by divorce, death, or adultery.  

Today its only practical effect (in my opinion) is to provide notice of real estate transactions to non-title holding spouses, and require their consent before real estate can be sold, mortgaged, etc.  In my practice, it is not unusual that I see a married couple who buys real estate in the name of only one of them.  Sometimes they tell me that one spouse has credit problems and they don't want that spouse to have an interest that can be attached by creditors.  Sometimes they tell me that the bank wants it done that way for a loan (although I don't understand the bank's logic in those cases). 

I don't worry too much about only having one spouse in title.  We can record a transfer on death designation affidavit to avoid probate if the title holding spouse should pass away, and dower provides some protection for the non-title holding spouse.  In these cases, both spouses often contribute to the house payments and expenses of home ownership, which would make the home marital property.  Because we have dower, the title holding spouse cannot cash-out all of the equity without the consent of the other. 

The proposal to abolish dower in Ohio is very simple: "The estate of dower is abolished. However, the abolition of dower shall not affect the dower interest of a surviving spouse whose interest vested before the effective date of this amendment."  But this doesn't provide any protections for non-title holding spouses in place of dower.  I worry about that.  

Consider this, for example:

 
Jane and John purchase a home together and because Jane went through a previous divorce she has bad credit.  They decide that John will be the sole person on the deed. Several years pass, and although Jane's credit is better they never add her to the title.  Jane and John equally contribute to the mortgage payments, insurance, the new roof they put on last spring, etc.  

John starts drinking and gambling.  He takes out a home equity line of credit to tap the equity in their house.  Without dower, Jane doesn't have to sign the mortgage.  John doesn't tell her about it and has the loan statements sent to his office address to hide the mortgage from her.  In a few years, John has gambled away all of the equity in the house. 

Jane files for divorce and discovers for the first time that after making mortgage payments for years, they have no equity in their home.

Michigan abolished dower effective April 6, 2017.  Michigan's dower was abolished in response to the U.S. Supreme Court's ruling in Obergefell v. Hodges, which essentially legalized same-sex marriages.  In Michigan only "wives" had dower interests, not husbands.  The uncertainty surrounding the application of dower in the same-sex marriage context was enough to motivate lawmakers in Michigan to abolish dower.  

However, there is still a protection for non-title holding spouses in Michigan when it comes to mortgages on a primary residence.  Even with the abolition of dower in Michigan, non-title holding spouses must still sign non-purchase money mortgages because of their homestead rights.  I'm not well versed in Michigan law, but from my research a refinance or second mortgage is not valid unless both spouses sign.  Unlike dower, the homestead rights apply to husbands as well as wives.

Michigan's homestead exemption "applies to any house that is owned, occupied, and claimed as a homestead by a person but that is on land not owned by the person.  However, this exemption does not apply to a mortgage on the homestead that is lawfully obtained. A mortgage is not valid for purposes of this subdivision without the signature of a married judgment debtor's spouse unless" it is a purchase money mortgage, or the mortgage has been recorded for more than 25 years without a claim of invalidity. (See MCL 600.6023)

If HB 407 passes in Ohio, dower will be abolished and, unlike Michigan, we won't have any protections for non-title holding spouses.  The familiy law lawyers seem to oppose getting rid of dower, and I understand why.  This doesn't seem to be a well thought out bill. 

Personally, I don't see the problem with dower in Ohio.  It applies equally to men and women, so we don't have the Obergefell dilemma that Michigan faced with regard to same-sex marriages.  And, although it is no longer necessary to serve its original purpose - to provide for widows, it does a nice job of filling its modern day role - making sure that non-title holding spouses are aware of mortgages and conveyances of the family home (and any other realty owned by their spouse).  It doesn't harm anyone, but abolishing it could cause harm to some.

I'm curious... what does your state do to protect non-title holding spouses?  Anything? 

 




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Categories: Ohio Legislation, Real Estate Law, Title Problems

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Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

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