Elective share Flashcards
Elective share
A legislative attempt to protect a surviving spouse from disinheritance, a compromise between an individual’s right to dispose of property and the state’s interest in protecting the family
A.k.a. forced share
The spousal elective share rules apply regardless of T’s intent, even if he deliberately tried to disinherit her
Applies to both testate and intestate estates
Elective share in Florida before October 1, 2001
The old rule let a surviving widow or widower elect against the decedent’s will
If the surviving spouse did so, he would receive 30% of the probate estate, minus mortgages, liens, and security interests from only the probate estate (not trusts, survivorship tenancy, payable on death accounts, life insurance benefits, etc.)
UPC Elective Share
UPC § 2-201 uses an augmented estate that could include more or less than Florida’s old rule
The share size varied based on the length of the marriage…
- Married 0-1 years – 1.5%
- Married 1-2 years – 3%, etc.
- +15 years – 50%
There is also a supplemental elective-share amount designed to increase the surviving spouse’s share to at least $75,000
2008 amendments to the UPC allow for the adjustment of inflation
Current FL elective share rules
The current rules generally apply to people who died after October 1, 2001
It is an augmented estate except, unlike the UPC rules, the spouse’s property is not considered, and it is a flat 30% of the elective estate
**in Florida, we DON’T change by time married, if they’re married for 1 second or 60 years, its 30% either way. (732.2065)
In Florida, we only use the decedents assets and in Florida there is NO minimum.
Just read: Assets included in the elective estate
- The assets that comprise the decedent’s probate estate
- The decedent’s ownership interest in accounts or securities that are registered as “pay on death,” “transfer on death,” or “in trust for” even if these are co-owned with the right of survivorship
- The decedent’s fractional interest in property not included under 2 or 7 if the property is held in a tenancy by the entirety or a joint tenancy with the right of survivorship (the tenant’s interest is calculated by dividing by the number of tenants)
- Property other than 2 property that the decedent previously transferred if she had the power to revoke the transfer unilaterally or in conjunction with another person (there is an exception that revocable transfers are not included if the revocation required the consent of all persons who have a beneficial interest in the property)
- Any interest in property if the decedent had either the right to, or the actual possession, or the use of, the property’s principal income or any interest in property if the principal could be distributed or appointed to the decedent or for the decedent’s benefit (property falls into this category if the right to distribute or appoint is within the discretion of anyone other than the spouse
- The net cash surrender value of a life insurance policy on the decedent’s life
- Amounts that a beneficiary receives under a variety of public and private pension and retirement plans because he survived the decedent (not including social security or railroad retirement act benefits)
- Either a transfer that occurred because a right, interest, or power terminated before death if the property would have been included in 4 or 5 if the termination had not occurred until death or any transfer not covered by one of the other categories if made within one year of death (except those that qualify for the annual gift tax exclusion)
- Property transferred in satisfaction of the elective shares
Just read: Assets excluded from the elective estate
- Transfers that were irrevocable before October 1, 1999, and irrevocable transfers made after that date but before the date that the decedent married the surviving spouse
- Transfers if the decedent received adequate consideration in money or money’s worth
- Transfers to which the spouse consented to in writing
- Proceeds of an insurance policy covering the decedent’s life to the extent the proceeds exceed the cash surrender value
- Any life insurance policy that is maintained pursuant to a court order
- The decedent’s half of certain property that is treated as community property under Florida law or under community property law of another state
- Property held in a qualifying special needs trust. § 732.2025
- Property that is included in the decedent’s federal gross estate solely because the decedent held a general power of appointment over the property
- Property that is the decedent’s protected homestead
Community property
Property acquired during marriage, except property acquired by gift, devise, or descent, adopted in certain states; one half belongs to each spouse, regardless of whose name is on the title of the property
If you own community property in another state and move to FL and die, then FL will recognize the state’s community property and give half to surviving spouse. The decedent’s share is not included in elective estate
Just read: In the absence of a provision to the contrary, the spouse’s share is satisfied from the following 6 categories:
- Interests that are included in the elective estate and that pass to or for the benefit of the surviving spouse
- Amounts that are included in category 7
- Community property interests
- Life insurance proceeds for the spouse’s benefit
- Special needs trust
- Property that would have fallen into the first five if the spouse had not disclaimed that interest
Just read: abatement of assets to satisfy the elective share
Class 1 are the decedent’s probate estate and assets in revocable trusts
Class 2 are interests included in the elective estate or those interests were pay on death and transfer on death accounts, survivorship tenancies, and the decedent’s interest in the cash surrender value of a life insurance policy covering the decedent’s life—it applies only to interests included in the elective estate but only if the decedent had at the time of death the power to designate the recipient of those interests
All other property interests, other than protected charitable interests included in the elective estate
Trusts in which the spouse has a beneficial interest but that are not elective share trusts or qualified special needs trusts
