4 Types Of Statutory Estates Created By State Law

Statutory estates are created by law usually with variations at the state or local level.

In layman terms, these are legislation that states the right of people towards specific property without needing to have a claimant’s name on the title.

1) Dower

A legal marriage via the registry of marriage is a ceremony that blends a wife’s legal existence with that of a husband.

With this in mind, real estate that is purchased during marriage by the husband, the wife will have legal rights to share the use of it.

This in effect, means that the wife will have legal ownership to one-half or one-third (depending on state laws) of the property for life.

The purpose of this arrangement is to protect the wife should she be left out of the husband’s will. It also implies that the husband will not be able to sell or liquidate the property without the explicit permission of his wife.

Dower rights can lead to tricky issues for real estate investors.

Should you buy a house whereby the wife of the seller has not relinquished her dower rights to it, she can rightfully file a claim for a portion of the ownership to the house upon the husband’s death.

Preventing investing nightmares like these is precisely why you need to conduct thorough title research beforehand and even buy title insurance to protect yourself from unpredictable future events.

To remove her ownership at the point of transaction, she needs to sign on the deed along with the husband or sign a separate quitclaim deed.

2) Curtesy

Curtesy is the husbands’ version of dower.

It is mostly similar except for one key material factor. And that is that the wife can legitimately remove these rights in her will.

Some state laws even require the couple to have had a child in order for curtesy rights to come into effect.

There has been a lot of debate in public forums regarding equal rights. So some states might lean towards equal rights while others are hell-bent on giving more power and protection to women.

Do check with your local laws to have a clearer picture.

But in the grand scheme of things, dower and curtesy are meant to require married couples to make decisions regarding the buying and selling property together. And to provide legal protection for a surviving spouse.

3) Community property

Many states legally recognize that each spouse have equal interest in all properties during marriage. A key criteria is that the acquisitions have to be made by a joint effort.

Property that fall into this category is called community property. When such property is mortgaged or sold, both husband and wife must endorse the actions by signing the documents.

As you can probably tell, this eliminates a number of potential problems that can arise from spousal co-investment decisions and family conflicts.

Upon the death of a spouse, ownership passes to the surviving spouse or legal heirs, or both.

4) Homestead protection

Almost all states have homestead protection laws. And they are enacted for 2 main reasons:

1. Provide legal protection in the event of judgments or debts that could possibly result in a forced sale of the house
2. Provide a widow with a home

Can you imagine a surviving widow having no place to call home just because of the passing of a spouse?

Homestead laws also prevent one party from selling or mortgaging a house without the expressed permission from the other party.

An important point to note is that residents in states with dower, curtesy, and community property rights, will automatically be protected by them. However, some states might require written documentation in order to grant homestead protection.

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