The Year's Allowance

 “One to Buy; Two to Sell” is a saying in North Carolina real estate, referring to a marital interest.  It is commonly used, yet rarely understood.  The purpose of this article is to clarify the oft-expressed expression. 

In North Carolina, when a couple marries and later buys a house, there is a presumption that the home is owned as Tenancy by the Entireties.  This is a form of ownership exclusive to married peoples and is akin to joint tenancy with a right of survivorship. Tenancy by the Entireties avoids probate as the surviving spouse automatically inherits the deceased spouse's share upon her death.  A last will and testament cannot supersede this; the surviving spouse automatically inherits.

A different scenario exists when a home is owned individually.  Let's use a scenario whereby Mom, a divorcée, owns a house solely in her name.  Mom has two daughters.  Mom makes a will naming her two daughters as owners upon her passing, each in equal shares.  Mom later remarries Husband, never changing her will, and never putting the Husband's name on the deed.  Upon her death, who owns the house?

Mom and Husband did not own the house as Tenancy by the Entireties since they were not married at the time of purchase (recall, Mom was single when she bought the house).  The law favors the free transfer of property, so nothing precludes Mom from leaving the house to her two daughters.  Upon Mom's death, the two daughters own the house, as was dictated by the terms of Mom's will.

So is the Husband left out in the cold?  Not exactly… NC law protects spouses from exclusion in a will. In this sense, the Husband has a spousal interest in the home.  According to North Carolina law, the Husband would be entitled to $30,000 for support for one year after the death of the deceased spouse.  The husband is entitled to this regardless of the terms of Mom's will.  The “Year's Allowance” is designed to protect surviving spouses from disinheritance.

The surviving spouse's Year's Allowance is to be satisfied with available funds in the deceased's estate.  However, if the estate lacks the funds necessary to satisfy the Year's Allowance, then Husband could obtain a lien on the home equal to that amount ($30,000). 

So Mom bought the home (“One to Buy”) but the Husband needs to remove his spousal interest (“Two to Sell”).  The daughters own the home, in equal shares, and the Husband is not an owner.  He simply has the ability to place a lien on the property.