An elective share is the amount of a surviving spouse’s lawful share of a deceased spouse’s estate. The elective share is also called the spousal elective share, statutory share, spousal share, and forced share. In some states, a child can claim an elective share of a parent’s estate. The laws that define and implement the elective share vary among the states. This article is a general overview of the elective share law, how the deceased spouse’s estate is calculated, and examples of how elective shares play a part in estate plans.
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Elective Share FAQs
1. What Is the History of the Elective Share?
The Uniform Probate Code (UPC) has specific guidance on the elective share; however, each state has its own interpretation of what it considers an elective share or what an elective estate consists of. The elective share concept originated with the English common law and is sometimes known as a modern-day form of a dower.
2. What Is the Purpose of the Elective Share?
The purpose of the elective share statutes is to prevent a decedent spouse from disinheriting the surviving spouse. While the state laws vary greatly, their common purpose is to ensure a surviving spouse’s right to receive a fair share of the decedent’s estate, increase accessibility to the property, and prevent the surviving spouse from financial ruin. Factors that affect the elective share can include the length of the marriage, the presence of minor children, and the independent wealth of the surviving spouse.
3. Is the Elective Share Automatic?
A surviving spouse has an absolute right to an elective share, but the surviving spouse may waive this right. A surviving spouse may waive an elective share by a disclaimer, commonly in a prenuptial agreement or postnuptial agreement. The surviving spouse must take steps to assert a claim for elective share rights within a certain time period in order to preserve these rights. If a surviving spouse does not assert elective share rights on time, the right will cease to be available. In other words, a lack of timely action will be a waiver of elective rights. A surviving spouse considering such action should seek competent legal advice from an estate planning attorney.
4. What is the Elective Share Amount?
In most states, the elective share amount is one-third to one-half of the deceased spouse’s estate. In some states, this share amount is a fixed amount, a percentage amount, or the amount that the surviving spouse would have received if the deceased spouse had no will (died intestate) based on each state’s intestacy statutes.
Can a Spouse Disinherit Their Spouse?
No. A spouse cannot disinherit their spouse absent a waiver. All states have laws that ensure that a surviving spouse receives a fair share of the couple’s property. As we will discuss below, some states are more protective of the surviving spouse than others. This protection means that a surviving spouse will receive a certain amount of the couple’s estate, regardless of what the deceased spouse has in their will, revocable trust, or other estate planning documents. In other words, a spouse cannot disinherit a spouse in a decedent’s will because the laws of all the states have some safeguards against this.
How Is a Deceased’s Estate Calculated for Purposes of the Elective Share?
1. Probate Estate Counted as Deceased’s Estate
The probate estate consists of only those assets that need to be probated. Generally, these are assets that are in the deceased’s name only. The probate estate does not include property in joint tenancy, assets with beneficiary designations, transfer-on-death designations, or pay-on-death designations. For example, if a bank account is in the deceased spouse’s name alone and has no pay-on-death beneficiary, this could be part of the probate estate. If real property assets are in the deceased spouse’s sole name, these could be probate property.
Generally, the probate court handles the probate assets and distributes them according to the deceased’s will. If the deceased died intestate (without a will), then according to the state’s intestacy laws.
As indicated above, the elective share overrides any contrary provision in the deceased spouse’s will.
For example, suppose Spouse1 and Spouse2 were in an unhappy marriage but remained married for many years. The spouses owned a home in joint tenancy with right of survivorship (JTWRS). Spouse1 did not want Spouse2 to have anything more than the home upon Spouse1’s death. To ensure this, Spouse1 prepared documents to transfer assets in Spouse1’s name alone automatically and outside of probate:
- Spouse1 created a pay-on-death document on Spouse1’s bank accounts, automatically giving the proceeds of the bank accounts to the couple’s children upon Spouse1’s death.
- Spouse1 made the couple’s children the beneficiary of Spouse1’s life insurance and retirement account, so it transfers directly to the couple’s children upon Spouse1’s death.
- Spouse1 made the couple’s children the beneficiary of Spouse1’s investment accounts, so they transfer directly to the children upon Spouse1’s death.
- The couple’s home in joint tenancy would be the only asset that would pass directly to Spouse2 upon Spouse1’s death.
When Spouse1 died, Spouse2 discovered that only the couple’s home was transferred to Spouse2, while the remaining assets automatically transferred to the children.
This example shows how one spouse can manipulate an inheritance in a state where the calculation of the elective share consists only of probate property. Although state laws vary, fortunately, few states support this type of disinheritance.
2. Elective Share – Traditional Election
As discussed, in a small number of states, a spouse could legally take steps to ensure that the bank accounts, insurance proceeds, retirement accounts, and investment accounts pass directly to the children and not the other spouse. However, in the majority of the states, the laws would not support these actions taken by one spouse to essentially disinherit the other spouse. Instead, their laws provide that all of the assets that the deceased spouse diverted from the surviving spouse through beneficiary designation, transfer on death, pay on death, and joint tenancy accounts are counted and included in the deceased’s estate to calculate the elective share.
In our above example, all of the assets of the deceased spouse’s estate, including the pay-on-death bank accounts, retirement accounts, investment accounts, life insurance, and joint tenancy accounts, are included in calculating the value of the deceased’s estate. The surviving spouse is then entitled to a percentage of this total amount as the elective share.
3. Elective Share and the Augmented Estate
In our example above, Spouse1 took steps to disinherit Spouse2 by designating a large portion of assets to the couple’s children as beneficiaries or transfer-on-death directives. As mentioned above, while some states allow for this manner of disinheritance, most do not.
In some states, the surviving spouse can elect a share of an augmented estate, especially when the deceased spouse effectively disinherits or leaves inadequate property to the surviving spouse.
Depending on state law, the augmented estate can include the entire estate of the decedent and the surviving spouse, including probate property and non-probate property. This includes proceeds from life insurance policies, transfer-on-death or pay-on-death accounts, the value of large gifts given away before the deceased spouse’s death, joint tenant ownership property, and property in either spouse’s name only. The augmented estate is generally a much larger valued estate from which to calculate the elective share for the surviving spouse.
4. Elective Share and Community Property
In community property states, most married couples own property equally during the marriage and before a spouse’s death. There are exceptions to community property, such as separate property a spouse received prior to the marriage by inheritance or gift. But generally, in community property jurisdictions, a surviving spouse automatically owns half of the community property estate when the other spouse dies.
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