Could Refinancing Your Home Waive Your Rights as a Surviving Spouse?

Washington law has long recognized a surviving spouse’s right to an “award in lieu of homestead” from their deceased spouse’s estate. Basically, the surviving spouse is entitled to an allowance from their deceased spouse’s property. This allowance takes priority over all other claims against the estate and is meant to ensure the surviving spouse has some means of financial support.

The award in lieu of homestead cannot be waived by the deceased spouse’s will. Indeed, the right to an award can override the terms of the deceased spouse’s will. But the surviving spouse can waive their right to an award in lieu of homestead. This can be done during the other spouse’s lifetime. For example, if the parties signed a prenuptial or postnuptial agreement, that may contain language waiving any rights to the allowance.

Appeals Court Rules Widow Entitled to Full Hearing on Her Claim for Award

Any purported waiver of a spouse’s right to an award in lieu of homestead will be strictly scrutinized by the courts. Indeed, the Washington Court of Appeals recently held that a Superior Court judge acted prematurely in ruling against a widow who petitioned for the allowance. The specific legal issue in this case was whether the widow “waived” her right to an award because she co-signed a form to help refinance her late husband’s home.

The husband and wife lived together in the home for more than 20 years. They both had children from prior marriages. The house itself was titled in the sole name of the husband. In 2006, the husband took out a home equity line of credit with his credit union. In 2013, he refinanced the home. The credit union required the wife to sign a “non-borrowing person signature attachment,” which stated that she would make “no claim of title or interest therein” on the home.

Shortly before he died in 2021, the husband signed a new will and a transfer-on-death deed leaving the house to his daughter. After his death, the wife filed a petition for an award in lieu of homestead, or alternatively, a ruling that the house should be considered community property. The daughter, acting as personal representative of her father’s estate, objected and alleged that the wife’s signature on the credit union attachment constituted a binding waiver of any award rights. The Superior Court agreed with the daughter.

The Court of Appeals said the trial judge failed to properly safeguard the widow’s rights under the law. Even if the credit union documents could be construed as a “marital agreement,” it did not comply with Washington’s requirements for postnuptial agreements. Nor did the loan refinancing agreement make any mention of the widow’s rights as a surviving spouse under Washington probate law. It was therefore premature for the trial court to conclude, without a full hearing, whether the widow actually waived her homestead rights.

Contact a Spokane Valley Estate Planning Lawyer Today

If you are concerned about your spouse’s rights and interests in your property after you die, then it is important that you speak with a Spokane Valley estate planning lawyer while you are still alive and able to manage your own affairs. Contact Moulton Law Offices, P.S., today to schedule a free consultation. We serve clients throughout Spokane Valley, Kennewick, and Yakima.

Source:

scholar.google.com/scholar_case?case=2125212121384809453