How does Florida’s Elective Share Affect my Estate Plan? Part One.
What is an “Elective Share”?
In situations where the decedent’s will has left their surviving spouse very little, or nothing, Florida law protects surviving spouse’s in two major ways: The Elective Share and Homestead. While both of these laws may affect your estate plan in significant ways, this blog and the next blog will focus on the elective share. A surviving spouse has the right to claim an elective share of the decedent’s estate, often termed “electing against the will.” By opting to claim their elective share, a surviving spouse can essentially supersede the terms of a will and bequests to other people in order to obtain a percentage of the decedent’s estate.
In Florida, the elective share is equivalent to 30% of the elective estate. Fla. Stat. §732.2065. However, calculating the elective estate may not be a simple task. Also referred to as the “augmented estate”, the elective estate is larger than the probate estate, and includes assets like:
- The probate estate
- Any interest held by the decedent in protected homestead property
- Any of decedent’s interests in jointly owned properties with rights of survivorship or tenancy by the entirety
- Decedent’s interest in any joint bank accounts, pensions, pay on death accounts
- Assets in a revocable trust
- Any gifts given or transfers made within 1 year prior to decedent’s death
Once the elective share has been determined, any liabilities or debts owed must be taken from this amount. The elective share is 30% of this value.
Satisfaction & Apportionment
After the amount of the elective share has been determined, if the value of the assets a surviving spouse received from the decedent exceeds this amount, the elective share is considered to be “satisfied.” However, if the value of assets already received from surviving spouse is less than the determined elective share, the remaining balance of the elective share will be satisfied by dividing and distributing from other categories or “classes” of direct recipients of the remaining elective estate- called “apportionment.” If the remaining balance of the elective share is not satisfied by one class, the next class will be apportioned, until the amount is satisfied. Fla. Stat. §732.2075(2). Florida law provides the order of class assets will be used to satisfy the remaining elective share:
- Class 1- The decedent’s probate estate and revocable trusts
- Class 2- Recipients of property interests included in the elective estate, such as pay on death accounts, property held as joint tenants with rights of survivorship or tenancy by the entirety, and life insurance cash surrender value
- Class 3- Recipients of all other property interests
To illustrate the above-mentioned, consider this example:
Husband dies with an estate totaling $500,000. This is comprised of investment real property owned with wife with rights of survivorship worth $200,000, a payable-on-death investment account worth $150,000 payable to husband’s child from a prior marriage, and various other cash assets willed to Husband’s grandchildren totaling $150,000 (assume there is no homestead).
Wife’s elective share would be $150,000. This comprises the $100,000 she already owns from her half of the jointly owned investment real property. The remaining $50,000 to fulfill her elective share would be taken from the cash assets willed to Husband’s grandchildren.
The elective share can be waived by a premarital or postnuptial agreement or will be waived if the surviving spouse fails to elect it within a certain period. In Florida, this period is either; (1) on or before the date that is 6 months after the date the surviving spouse was served a copy of the notice of administration, or (2) the date that is two years after the date of the decedent’s death- whichever of these dates is earlier. Fla. Stat. §732.2135.
The elective share can offer a crucial ‘safety net’ for a surviving spouse. However, as you can see from the example above, failure to take into account the elective share can complicate your estate plan (or even alter it completely). Working with an experienced attorney to plan accordingly can ensure that your estate plan is effectively executed accordingly to your wishes.
Contact the knowledgeable attorneys of Chepenik Trushin LLP (combined 53 years of sophisticated legal acumen) to assist you with your estate planning, probate administration, trust litigation and Medicaid planning needs; Bart Chepenik, JD, LL M, 305-613-3548 (accessible days, nights and weekends) or Brad Trushin, Esq, 305-981-8889.