Effective January 1, 2017, the laws governing the “elective share” changed. This law concerns the entitlement of a surviving spouse to a specific share of the deceased spouse’s estate, if the deceased spouse died without a will or with a will leaving less than the statutory amount to the survivor.
Under the prior law, the surviving spouse had a right to claim a share of the deceased spouse’s property, and the share depended on whether there were children from that marriage or if the deceased spouse left children from a prior marriage. Under the latter circumstance, the surviving spouse was entitled to only 1/3 of the deceased spouse’s estate while the children, of whatever age, received 2/3. Sometimes, that made for a pretty unpleasant surprise!
The new law begins by redefining the “augmented estate”, the amount from which the elective share is determined. The augmented estate now includes:
- The decedent’s net probate estate,
- The decedent’s non-probate transfers to others,
- The decedent’s non-probate transfers to the surviving spouse, and
- The surviving spouse’s property and non-probate transfers to others.
The major change in the new law is to include the surviving spouse’s property in the augmented estate. The new law treats marriage as an economic partnership, by including all the property of the marriage, not just that property in the deceased spouse’s probate estate. This now includes property from revocable trusts, property passing by “transfer on death” or “pay on death” designations and assets passing by beneficiary designation, such as retirement accounts and life insurance.
Once the value of the augmented estate has been determined, the new law provides a vesting schedule based on the number of years the couple was married to establish the elective share of the surviving spouse. According to the statute, the value of the elective share is determined by a multiplier based upon how long the couple was married. For example, if the couple was married for less than 1 year, the multiplier is 3%. If they were married 9 years but less than 10 years, the multiplier is 54%. If the couple was married for more than 15 years, the multiplier is 100%. In all cases, the surviving spouse is entitled to 50% of the final figure.
If the principal family residence is included in the augmented estate, the surviving spouse cannot be forced to leave the residence while the elective share is being calculated and what assets should be used to pay it. The surviving spouse may occupy the residence without paying for rent, repairs, taxes or insurance.
The new law on the elective share and augmented estate can be viewed here.
The new law includes a vesting schedule based on the number of years the couple was married in order to determine the final amount payable to the surviving spouse.
Less than 1 year 3%
1 year but less than 2 years 6%
2 years but less than 3 years 12%
3 years but less than 4 years 18%
4 years but less than 5 years 24%
5 years but less than 6 years 30%
6 years but less than 7 years 36%
7 years but less than 8 years 42%
8 years but less than 9 years 48%
9 years but less than 10 years 54%
10 years but less than 11 years 60%
11 years but less than 12 years 68%
12 years but less than 13 years 76%
13 years but less than 14 years 84%
14 years but less than 15 years 92%
15 years or more 100%