Assuming there is no pre-marital agreement, a surviving spouse who is not included in the decedent’s Will may take a pretermitted share or an elective share. Which one to take requires an analysis of what the decedent owned and – more importantly – how he owned it.
A “pretermitted” spouse is one who becomes a spouse after the decedent created his Will. The law assumes that the decedent intended to provide for the spouse but simply did not get around to updating his Will. The pretermitted share is the same as the intestate share, which is 50% of the probate estate. The elective share makes no assumption about what the decedent intended and is a mechanism for enforcing Florida’s public policy against disinheriting one’s spouse. The elective share is 30% of the elective estate. The elective estate is much broader than the probate estate and may include revocable trusts, jointly-owned property, pay-on-death accounts, life insurance, etc. Accordingly, an informed decision about whether to take a pretermitted share or an elective share requires information not only about what the decedent owned but also about how he owned it.
For example, let’s say Roger has two children from a prior marriage and prepares his Will in 2004 leaving his entire estate to them. In 2008, Roger marries his long-time girlfriend, Susan, and neither signs a pre-marital agreement. The newlyweds are so busy that they forget to change Roger’s Last Will and Testament to add Susan as a beneficiary. Roger unexpectedly dies in 2012. Is Susan cut out of Roger’s estate because she is not provided for in Roger’s 2008 Will? The simple answer is “no.” The more complicated question is whether Susan should seek the pretermitted spouse’s share or an elective share. The answer to that question requires more analysis and information.
Let’s break the example down into two simple hypotheticals:
Hypothetical #1: Roger has $1,000,000 in assets. He owns $900,000 of stocks and bonds in his revocable trust but he left $100,000 in his sole name at Main Street Bank. Roger’s probate estate is $100,000 and his elective estate is $1,000,000. Susan is trying to decide whether to take her pretermitted share or her elective share. The pretermitted share is 50% and the elective share is 30% so she thinks she should take the higher percentage. This would be a huge mistake. The pretermitted share is 50% of the probate estate ($100,000 x 50% = $50,000). The elective share is 30% of the elective estate ($1,000,000 x 30% = $300,000). In this scenario, Susan comes out better by taking her elective share.
Hypothetical #2: Roger has $1,000,000 in assets. He owns $900,000 in his sole name at Main Street Bank and $100,000 in a pay-on-death account for his children. Susan is again trying to decide whether to take her pretermitted share or her elective share. The pretermitted share is 50% of the probate estate ($900,000 x 50% = $450,000). The elective share is 30% of the elective estate ($1,000,000 x 30% = $300,000). In this scenario, Susan is much better off taking her pretermitted share of the probate estate and forfeiting any interest in the pay-on-death account.
It is important for a surviving spouse to hire his or her own lawyer to represent them in connection with a decedent’s estate and to advise them about which statutory election is best for them. If you or a loved one needs to speak to an attorney about pretermitted share or elective share matters, please call the attorneys at Adrian Philip Thomas, P.A.