June is Pride Month, a time to celebrate love, diversity, and the progress toward equality for all. What better way to celebrate than diving into the fascinating, if somewhat dusty, world of dower and curtesy rights and how they affect your taxes? After all, nothing says pride like understanding how centuries-old estate laws can impact modern-day same-sex couples.
Dower and Curtesy: A Throwback to Gender-Specific Rights
First, let’s clarify some confusion. “Dower” and “curtesy” are not just terms you might hear at a medieval-themed wedding.
Historically, dower refers to the rights granted to a widow, entitling her to claim a portion, typically one-third, of her deceased husband’s estate. This provision was essential in times when women lacked property ownership rights, ensuring they had a means of support after their husband’s passing.
On the flip side, curtesy granted a widower rights to his deceased wife’s property, but only if they had produced offspring together. This ensured that the husband’s rights to his wife’s estate were tied to producing an heir (no pressure there!)
At its core, the historical intent of dower and curtesy laws aimed to safeguard surviving spouses from potential destitution and dependency. Dower and curtesy were the safety nets of their time, ensuring that a widow or widower could support themselves without relying on the kindness of in-laws or the state. While their direct application has waned in many jurisdictions, their legacy persists in influencing legal precedents and discussions around inheritance and property rights.
The Modern Makeover
Fast forward to the 21st century, and you’ll find that dower and curtesy rights have been mostly abolished or heavily modified. These gender-specific laws have been replaced by more inclusive statutes. So now, if you’re in one of the three states that still recognize these rights—Arkansas, Ohio, and Kentucky—your spouse, regardless of gender, might be entitled to a share of your estate.
In Arkansas, the amount a spouse receives under dower and curtesy will depend on whether they have children. The surviving spouse is entitled to one-third of the deceased spouse’s real property. If there are no children, the surviving spouse is entitled to one-half. Additionally, the surviving spouse’s right to the real property supersedes creditors’ claims against the estate in probate.
In Ohio, the surviving spouse receives a life estate in one-third of the real property the deceased spouse owned at any time during the marriage. It allows the surviving spouse to receive one-third of rents or profits from such real estate for the rest of the surviving spouse’s life. The only ways to extinguish dower rights in Ohio are death, divorce, or voluntary, written release of dower at each property transfer transaction.
In Kentucky, the surviving spouse is entitled to half of the surplus real estate in fee where the deceased spouse or their proxy held a fee simple estate at the time of death. Additionally, the surviving spouse has a life estate in one-third of any real estate where the deceased spouse or their proxy held a fee simple estate during the marriage but not at the time of death. However, a surviving spouse does not have dower or curtesy rights in land that was sold but not conveyed by the deceased spouse before marriage, land sold in good faith after marriage to satisfy a pre-marital encumbrance, land sold in good faith after marriage to satisfy an encumbrance where the surviving spouse consented, or to satisfy a purchase-money mortgage.
As societal norms evolved and legal frameworks adapted to reflect more egalitarian principles, dower and curtesy rights underwent significant modifications or outright abolishment in many jurisdictions. Most recently, in 2017, Michigan repealed dower following the U.S. Supreme Court’s 2015 decision in Obergefell v. Hodges. The decision, which requires states to recognize same-sex marriages, challenged the legality of Michigan’s laws related to dower rights.
Tax Implications: IRC 2034
Now, let’s talk taxes—specifically IRC 2034—a part of the tax code that deals with dower and curtesy interests. Under IRC 2034, the value of an estate for tax purposes includes any interest held by the surviving spouse, whether classified under dower, curtesy, or a statutory substitute. Thus, estate taxes are assessed on the total value of the estate before any deductions for the surviving spouse’s share. In other words, the IRS will get its share first despite the deceased spouse’s obligation to their surviving spouse.
Pride and Prejudice in Modern Estate Planning
The recognition of same-sex marriages nationwide ensures that spousal inheritance rights are now universally applicable, representing a significant milestone in the pursuit of equal legal standing for all couples.
However, disparities may still exist for couples in domestic partnerships or civil unions, underscoring the importance of consulting legal professionals to tailor estate plans that uphold individual preferences and protect loved ones.
Final Thoughts on Navigating Estate Planning with Pride
While the intricacies of dower, curtesy, and their tax implications may seem esoteric, they remain pertinent to estate planning strategies in certain jurisdictions. Awareness of these laws ensures that individuals can navigate potential complexities with clarity and foresight, safeguarding their intentions and securing equitable outcomes for their loved ones.
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