Thinking of Cutting out your spouse in your estate plan? Think again

Kristen Marks

by Kristen Marks

Kristen Marks is an ultra trail runner, Peloton rider, yoga and meditator enthusiast, attorney, author, speaker, proud wife and mom to two young adult children, and the founder of My Pink Lawyer®, Florida Estate & Legacy Planning attorneys. Kristen has been crafting professional estate plans for Florida women and their families for over 25 years.

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With the proliferation of "blended" families in this era, it is not uncommon, and oftentimes preferable, to structure your affairs so that your children receive an inheritance immediately upon your death even if you are survived by your "new" spouse.

 

That said, Florida has long had a "forced heirship" law for surviving spouses.

 

In other words, unless waived in writing by your spouse (usually by a prenuptial or postnuptial marital agreement), you cannot legally "cut out" your spouse from your estate plan.

 

One of those forced heirship rights is Florida's Elective Share Statute that guarantees your surviving spouse 30% of your total estate value.

 

Effective July 1, 2017, Florida updated the Elective Share laws.

 

Here's an overview of the changes and who "wins" with each change:

 

1.  The value of your Homestead is now INCLUDED in the elective share amount.

This is a huge change because previously, the value of the homestead was IN ADDITION to the 30% Elective Share. Now, if you give your home to your spouse, then the entire value will offset against the 30% calculation. It is now possible that by giving your home to your spouse, that could theoretically satisfy the Florida Elective Share.

If your spouse only inherits a Life Estate Interest in the Florida Homestead, or instead opts for a one-half interest, then only one-half (1/2) of the homestead value will be included in the Elective Share amount.

Deceased Spouse wins this change.

 

2.  Surviving Spouses are granted more time to file their election.

The deadline for a surviving spouse to proactively assert their Florida Elective Share claim is the earlier of: 6 months after being served the Notice Administration or 2 years following their spouse's death. 

This deadline can now be extended for an additional 40 days after the initial filing deadline.

Surviving Spouse wins this change.

 

3.  Automatic "Saving" of Your Elective Share Trust if you forget to include a crucial provision.

When drafted properly, you can control the assets you leave your spouse from the grave in an "Elective Share" trust that satisfies the Florida Elective Share but still allows you to decide who ultimately inherits those assets upon your surviving spouse's death.

These trusts are tricky to draft and certain provisions must be included for it to qualify for the Florida Elective Share.

For example, the Florida Elective Share Trust must include a provision that allows the surviving spouse beneficiary to convert non-income producing assets to income producing assets (i.e. sell vacant land that is not producing income and purchase a rental property instead).

If this provision was inadvertently omitted from the Elective Share Trust, then the parties could end up in court. Not any more.

Now, with the revised law, this provision will automatically be added into your Elective Share Trust if it was left out.

Deceased Spouse wins this change.

 

4.  Awarding attorney's fees in Elective Share litigation has now gotten fairer.

Prior to this change, attorney's fees for the estate could only be assessed against the spouse claiming the elective share if the election was filed in "bad faith." Proving bad faith is a very difficult hurdle.

Now, attorney's fees are awarded "as justice requires," giving a judge much broader discretion in awarding attorney's fees to one side or the other.

Everyone wins this change.

 

5.  Awarding interest on contributions to the Florida Elective Share has now gotten easier.

If assets pass outside of probate to beneficiaries other than the surviving spouse (such as the deceased spouse's children), then once the Elective Share amount has been calculated and there are insufficient estate assets in the probate estate to satisfy the amount to the surviving spouse, the court can order the beneficiaries to repay the surviving spouse directly from the assets they received, PLUS interest.

Prior to this change, interest began accruing only after an Order of Contribution was entered by the court.

Now, interest begins accruing on any amount of the Elective Share not repaid to the surviving spouse within 2 years of the deceased spouse's death, whether an Order of Contribution has been entered or not.

Surviving Spouse wins this change.

Conclusion

Although the scoreboard looks fairly even above, overall surviving spouses win with these changes which make it even easier for them to enforce their elective share rights.

 

Still confused about who you may and may not leave your money and other assets to when you die?

Or how to best protect that inheritance for your loved ones from their creditors, pesky government interference, Uncle Sam, and greedy family members?

Then you'll want to order our Free book, "Wise Women Protect their Assets: An Essential Estate Planning Checklist" by clicking the photo below

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