In 1975, Florida ended the concepts of dower and curtesy and replaced them by statute giving a surviving spouse the right to take an “elective share” of a deceased spouse’s estate. The elective share statute provided the surviving spouse with a minimum 30% share of a deceased spouse’s probate estate. That gave the surviving spouse a choice of accepting what was provided under the deceased spouse’s Will or electing to take 30% of their spouse’s net probate estate.
A surviving spouse had no claim to assets that did not pass through probate. It was relatively simple to defeat the elective share by creating a revocable trust and placing assets in the trust, or even providing for death beneficiaries on financial accounts. Using these methods, many surviving spouses were disinherited entirely.
Since public policy of the elective share was to protect a surviving spouse and avoid that spouse becoming a burden on society, the legislature decided to address the easy ability to avoid the elective share. The legislature modified the elective share law so that the elective share would apply to virtually all of a decedent’s assets in 1999. The new statute created a concept known as the “augmented estate.” Property subject to the elective share now includes value of:
a. The deceased spouse’s probate estate;
b. Bank accounts and financial accounts
titled jointly with right of survivorship
or otherwise transferable on death;
c. Revocable trusts created by the
d. Interest in assets transferred by the
deceased spouse in which the deceased
spouse retained right to income or
e. The deceased spouse’s interest in
property held as joint tenants or tenants
by the entirety (which would otherwise
pass to the co-owner);
f. Cash value of life insurance (not death
g. Pensions and retirement accounts;
h. Gifts and specified transfers of assets
out of the deceased spouse’s estate
within one year of death; and,
i. Any transfers of assets by the decedent
to meet requirements of elective share in
the surviving spouse.
The elective share statutes recognize that a surviving spouse may receive assets as a result of co-ownership with the deceased spouse, or other transfer arrangements such as distribution from trust, payable on death of accounts and the like. Those assets are credits against the surviving spouse’s possible claim. The statutes also provide a method for determining values for calculation, generally mandating use of fair market value at time of transfer (for pre-death transfers) or on date of death after deducting claims or expenses attributable to the assets.
Distribution of the elective share is not automatic and is not guaranteed. The surviving spouse must file an election in the decedent’s probate case within six months after receiving notice of administration. If there is any proceeding which might affect the amount of the elective share, the filing deadline can be extended until 40 days after determination of such proceeding, but in any event an elective share must be filed no later than two years after the decedent’s death. Since the claim has to be filed in probate, if no probate estate is open, that means the surviving spouse also has to open a probate estate.
Why might a surviving spouse not pursue the elective share? The surviving spouse could simply choose not to pursue an elective share. Perhaps he or she does not need the money or has an “understanding” with the decedent that the elective share will not be sought.
Right to an elective share can be modified or waived by a pre-nuptial or postnuptial agreement. And, even without a pre or post nuptial agreement, the statutes provide a method for some control over the elective share by the decedent by providing authority for the decedent to establish an elective share trust to meet the elective share requirements. The decedent can leave assets in trust equal to or greater in value than the elective share for benefit of a surviving spouse. Whatever is left in the trust at death of the surviving spouse goes to other beneficiaries selected by the decedent if the trust meets the following criteria:
1.The surviving spouse must be entitled
for life to use of the property or to
all of the income payable at least
2. The surviving spouse must have the
right to force the trustee to make
property productive; and,
3. While the surviving spouse is alive,
only the surviving spouse has power to
distribute income or principal to anyone
other than the surviving spouse.
Many have taken advantage of the elective share trust option, which means the surviving spouse will not have right to spend all of the assets or leave them to his or her beneficiaries but will still get the protection of income and use during his or her life. This is a particularly attractive option in second marriages, often for both spouses.
If ignored, the elective share can undo a poorly executed estate plan. Although it can be waived in writing or simply by inaction, failure to consider it as part of estate planning can be a big mistake.
William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice.