In my previous post, I discussed some of the minor changes to the Florida Probate Code enacted by the Legislature this year. In this post, I will discuss one of the major changes, and that is to the Elective Share rules. The Elective Share rules are based upon the old English common law rules of dower and curtesy. In short, the rules provide that if you are married, you are not allowed to disinherit your spouse. If you leave your spouse out of your will and give everything to your children or your mistress, or, if you leave your husband something but he is unhappy with it, then in Florida the surviving spouse has the right to take what’s known as an elective share. When people first hear about this they are often outraged. “It’s my money and I should be able to leave it to whoever I want to!” they say. But the legislature decided that the state has a fundamental interest in protecting poor old widows (and in rarer cases widowers) from being kicked out on the street by the vengeful children of their recently deceased spouse (this is also the reason behind the Homestead rules of devise and decent.)
The amount of the elective share is 30%. Not too long ago it was fairly easy for estate planners to avoid the elective share by certain transfers, life insurance purchases, and pay on death accounts, so that the deceased spouse did not own any property that would be subject to the elective estate upon their death. Then, the Florida legislature changed the rules to create what is known as the “elective estate.” The elective estate includes the decedent’s probate estate, interest in transfer on death accounts, the cash surrender value of his life insurance, and even property given away by him during the one year period preceding his death.
Once the elective share is determined, by adding up all of the property comprising the elective estate (and subtracting any allowable deductions), the surviving spouse is entitled to 30% of that. But the next question is how is that paid? If the elective estate is comprised of life insurance going to Son A and an IRA account where daughter B is the beneficiary, and property given to C before the decedent died, how is the elective share satisfied? Or to put it in laymen’s terms “who get’s screwed?”
The Legislature substantially amended Section 732.2075, “Sources from which elective share payable; abatement” by providing that if certain property passing to the surviving spouse automatically does not satisfy the elective share, then the unsatisfied balance shall be “allocated entirely to one class of direct recipients of the remaining elective estate and apportioned among those recipients, and if the elective share amount is not fully satisified, to the next class of direct recipients,” in a certain order, until the elective share is satisfied.
In the next post, I will discuss the various classes from which the elective share is satisfied, and the new rules regarding disclaimers.