A husband dies leaving an estate worth fifty million dollars, and he leaves his less than pleased wife a mere two millions, looks like she needs to adjust her spending habits. But not so fast, in Florida elective share laws allow the surviving spouse to claim a percentage of the estate in lieu of what they were left under the decedent’s will.
- In Florida, to determine whether a widow is entitled to an elective share or not is determined by a two-step procedure.
- Under Florida Probate Rule 5.360, the surviving spouse’s entitlement of his or her elective share is established under paragraphs (c) and the amount of elective share is determined under (d) unless there is an adversary proceeding
Here is a crash course on the history this peculiar inheritance law:
- Prior to 1968, dower and curtesy in Florida was utilized.
- A dower was the amount the wife was entitled and a curtesy was what the husband was entitled.
- The elective share is a substitute for dower and curtesy, which have been abolished. See In Re Estate of Anderson, 394 So.2d 1146 (Fla. 4th DCA 1981).
- Dower and curtesy were abolished because a spouse could circumvent the dower or curtesy by using other estate planning instruments. Therefore, the dower and curtesy were replaced with the elective share statute.
Why does Florida use elective share? What does it say?
- One major reason for the elective share statute was to ensure a surviving husband or surviving wife received the same benefits regardless of sex.
- Originally, the elective share was 33 1/3% off the top leaving the children burdened with creditor’s claims and estate expenses of administration.
- The elective share statute was revised in 1974 changing the dynamics of the elective share by decreasing the amount the surviving spouse was entitled, increasing the residuary estate, and treating all beneficiaries equally as to costs and expenses.
- Now, the elective share in Florida is currently set at 30% of the net elective estate which means that the surviving spouse carries a proportional share of the estate cost and expense burden.
How can you determine your entitlement to an elective share? To determine elective share entitlement, a two-step procedure is utilized in accordance with Florida Probate Rule 5.360.
- First is the question of entitlement, a spouse may have forfeited their right to the elective share through a prenuptial agreement or other contract of similar effect.
- Calculate the total assets and then calculate 30%. The determination of a 30% for a surviving spouse’s elective share comprises of the following to determine the 30% elective share amount:
- Elective Estate. The elective estate may include probate assets, gifts in the last 12 months, payable on death accounts, jointly titled assets, life insurance cash surrender value (does not include death benefit), annuities, revocable trust assets, and retirement accounts.
- Calculate Net Elective Estate. The net elective estate is determined by deducting the liabilities from the elective estate. Administration of the estate and attorney fees to establish the surviving spouse’s elective share is not considered a liability to determine the net elective estate.
- Calculate Elective Share. Once the net elective estate is determined, you multiply by 30%.
- Calculate Satisfaction of Elective Share. You would take the Elective Share minus any amounts received or to be received from all sources pertaining to the decedent’s death. Under some circumstances, the spouse may have already received their elective share from one or more assets listed under the elective estate above.