The third spousal right for discussion is “elective share.” Absent a valid waiver of spousal rights, the elective share serves as a floor for inheritance. It presents a surviving husband or wife with the opportunity to make sure they receive at least thirty percent of the deceased spouse’s “augmented estate” or “elective estate.” A keen reader may notice the absence of the phrase “probate estate.” This is because the elective share applies to more than just assets that pass-through probate and which are controlled by a Last Will and Testament. The augmented estate includes a large swath of assets, including property held in a revocable trust, jointly held property, property with a right of survivorship, and certain property transferred prior to death.
A surviving spouse has a right to claim the elective share but does not have an obligation to seek the elective share. For instance, a spouse may already be set to receive more than thirty percent of the elective estate, or a spouse may be satisfied with what has been left to them (even if less than thirty percent of the elective estate).
Apart from a very limited exception, the deadline to file a proper election is the earlier of (1) six months after the date of service of a copy of the notice of administration (which is a document served during probate administration); or (2) two years after the date of the decedent’s passing.
Once it is determined that a surviving spouse has a right to the elective share and desires an elective share, it is necessary to determine the size of the augmented estate so that all interested parties know what thirty percent equals in terms of a dollar value. The following is an abbreviated, simplified list of what is included:
The decedent’s “probate estate” meaning that which is controlled by their Last Will and Testament.
The decedent’s interest in their protected homestead property.
The decedent’s ownership interest in accounts or securities registered in “Pay On Death,” “Transfer On Death,” “In Trust For,” or co-ownership with right of survivorship form.
The decedent’s fractional interest in jointly held property (other than accounts or securities).
Property transferred by the decedent to the extent that at the time of the decedent’s death the transfer was revocable (such as a revocable trust).
The decedent’s beneficial interest in the net cash surrender value of any policy of insurance on their life.
Pension and retirement accounts.
Property transferred during the 1-year period preceding the decedent’s death.
As example, if the value of the elective estate is $1,000,000.00 then the elective share is $300,000.00.
In satisfying the elective share, Florida law provides that property interests included in the elective estate that pass or have passed to or for the benefit of the surviving spouse are counted against the amount owed. For instance, if the elective share amount is $300,000.00, and the surviving spouse is going to receive $250,000.00 from the probate estate, then only $50,000.00 is still owed. The issue is that the remaining $50,000.00 comes from other assets designated to go elsewhere (such as to other family members)
The elective share is a very powerful spousal right and yet it is not well known to the average person. Many people think that simply providing for a spouse is enough, or that a verbal agreement as to an appropriate amount is the end of the story. The possibility of an elective share claim should always be factored into estate planning so that appropriate provisions are made, legally recognized waivers are secured (if desired), and clients can ensure their assets are not reallocated after their death.