February 9, 2019

Taking Care of Business – What Are “Dower” Rights And How Do Spousal Interests Affect Your Business And Real Property Rights

What are Dower Rights?

You may have heard of the term “dower rights.” But, what is it? Well, in simple terms, it is a married person’s right in the homestead and property of their wife or husband. It is legislated in the Dower Act, which protects the rights of a spouse and prevents the other spouse from selling, mortgaging, or transferring or gifting the property out from under them.

Dower rights, as well as spousal property claims, can have costly impacts on you, if you don’t address them with proper legal steps.

What this means when you sell or refinance your house, or make your Will

If you own a home that you or your spouse lived in and the title to the property is only in one of your names, the spouse without title in their name must sign a properly-prepared dower consent before you can legally transfer, mortgage, or gift the property.

When making you Will, remember that dower and other spousal rights belong to the surviving spouse, so you cannot give what you don’t own (by Will or otherwise), and dower or spousal rights may still attach to your assets and what you thought you gave in your Will may not in fact go to your beneficiaries. At least not without dealing with any applicable spousal claims.

Divorce and your business

Spousal rights are often overlooked when you start a new company. Upon break-up of the marriage, your spouse’s rights in the company can change your plans significantly. This can be especially so if your spouse is a co-founder of your business or if you bring a new spousal partner into the business.

A company held by one of both may, in some situations, be marital property to be divided under the Matrimonial Property Act. If property is divided, there may be a risk that the former spouse may be deemed a shareholder.

What you can do about it

Whether you simply want to simplify handling your property, your business, or your estate plan, there are a number of steps you can take to protect your interests. These include:

1. Getting a Release of Spousal Rights (including Dower) for Property: Your spouse could sign a release of their rights, dealing with the specific lands or other property or business assets.

2. Shareholder Agreement: Shareholder Agreements govern the relationship between the shareholders of the company and its purpose is to protect all of their interests and kept the business running if there are ever problems in the future. Our lawyers can draft an agreement that will ensure that a former spouse of a shareholder cannot become a shareholder through divorce. This protects the value of your business, because it may ensure that no shareholder has their ownership or disclosure rights restricted or hijacked by a spousal claimant.

If both spousal owners have shares in a company, the Shareholder Agreement could plan ahead for a situation where maybe they cannot work together anymore. We can help you create the remedy for this problem, in advance, to create mandatory buying-and-selling rights, in the event of an irreconcilable dispute; you can even pre-determine the buy-out price!

3. Pre-nuptial Agreement: Well before you get married, you should consider making a pre-nuptial agreement to deal with property owned jointly or by either spouse (amongst other issues these agreements can avoid!).


To manage potential risks of a new relationship, we encourage you to start right now, with good planning. It sure can protect you later down the road! To discuss this, please contact one of our Business Law or Wills and Estate or Family Law lawyers today.