Recent Changes to the Law on a Spouse’s Share of an Estate
When someone dies without an estate plan there are usually a lot of questions about what happens to his/her belongings. In many cases, this issue must be settled in court through the probate process. In practical terms, the probate process includes settling outstanding debts with creditors, collecting probate property, and distributing it to the rightful heirs. Spouses and children are naturally most concerned about the share they may receive. One particularly important point in probate cases, which will be explored below, is the issue of a spouse’s elective share, an issue that can lead to disagreement and litigation. Probate is an involved process with many technical legal rules that must be followed to ensure the court will approve the distribution of property and the closure of the estate. Using an experienced probate attorney to oversee a probate case, and handle litigation if necessary, will help to ensure the procedure is completed in an efficient and proper manner. Recent changes to the law on the spouse’s elective share, effective as of July 1, are intended to offer additional financial security for the surviving spouse. A discussion of the elective share, generally, and the recent changes to the law in this area, will follow below.
Elective Share Generally
Surviving spouses typically suffer the most financially when the other spouse dies, and many are in real danger of becoming destitute if they do not receive enough of the proceeds from the deceased spouse’s estate. To avoid this possibility, surviving spouses are specifically protected under probate rules by awarding them entitlement to a minimum amount of the deceased spouse’s estate, i.e., the elective share. The current amount of a spouse’s elective share is 30 percent, which is meant to be more in line with the division a spouse would typically receive in a divorce. In order to ensure the 30 percent is representative of the deceased spouse’s entire estate, the property a surviving spouse may draw from is more expansive than just the probate estate, and includes the following examples:
- joint bank accounts;
- revocable trusts;
- pensions and retirement plans;
- life insurance policies payable to someone other than the surviving spouse (up to the surrendered cash value at the time of the deceased’s death); and
- transfers made within one year of the deceased spouse’s death.
Note that a surviving spouse is only entitled to access property designated for other people to reach the 30 percent threshold, and once met, he/she cannot further dip into other property allocated to someone else to increase his/her share. Further, the elective share can be barred or waived in valid prenuptial, or other, agreements entered into before or after marriage.
New Legal Changes
The recent revisions to the law on a spouse’s elective share primarily relate to the inclusion of the deceased’s homestead in the property used to calculate what the share should be, and the recovery of attorney fees and costs. Specifically, the law now expressly includes the homestead as part of the elective estate, and sets out a valuation system that varies with the interest the surviving spouse has in the property. If the spouse has a full interest in the property, the fair market value of the property at the time of the deceased’s death is used. If the surviving takes a lesser interest, the value for purposes of the elective share is half of the fair market value. Finally, the new law allows a judge to order any party in a proceeding related to the elective share to pay attorney fees and costs if the dispute involves:
- the amount or entitlement to the elective share;
- satisfaction of the elective share; or
- property interests in the elective estate.
Talk to a Florida Probate Attorney
Dealing with the death of a loved one is never easy, and the legal issues that come with death can quickly overwhelm most people. But you do not have to handle everything alone. An experienced probate firm, like Fort Lauderdale’s Joyce A. Julian, P.A., can take over the legal aspect of this transition and allow you time and space to grieve your loss. Call the office today at (954) 467-6656 for a free consultation, and learn how they can help you.