Florida Elective Share
The Florida Elective Share is a means by which surviving spouses receive a fair share of their deceased spouse’s estate, no matter what the estate planning documents say. In general, the Florida elective share provides that the surviving spouse is to receive no less than 30% of the deceased spouse’s assets. The calculation of the elective share is the most complex part of Florida probate.
The computation of the Florida elective share uses a series of calculations, as follows:
The elective share calculation starts with a computation of the Elective Estate. The Elective Estate attempts to measure all of the property of the decedent that should be fairly included in the calculation. The Elective Estate includes the following assets:
- property in the probate estate
- gifts within the last year before death
- pay on death accounts
- jointly titled assets
- assets in a revocable trust
- retirement accounts
- cash surrender value of life insurance owned by the decedent (but not the death benefit, unless the death benefit is paid to the probate estate)
The personal representative might not know about all of the non-probate assets that comprise the Elective Estate, so may need to investigate. A surviving spouse might also perform discovery to try to identify and value all of the potential assets of the Elective Estate.
Once the Elective Estate is determined, the Net Elective Estate is calculated. Essentially, liabilities of the decedent are subtracted from the Elective Estate to determine the Net Elective Estate. Importantly, expenses of administration are not liabilities for this purpose and therefore do not reduce the Net Elective Estate in Florida. (Other states have a different rule.) A consequence of not taking into account expenses of administration is that any attorney fees or costs incurred in litigating an elective share dispute are borne by the other beneficiaries of the estate, not the surviving spouse seeking elective share.
Once the Net Elective Estate is computed (Elective Estate – Liabilities of the Decedent), 30% of such amount is the Elective Share.
Next is to compute the Satisfaction of the Elective Share. The amount needed to satisfy the Elective Share is simple – the amount of the Elective Share minus that amounts already received (or to be received) by the surviving spouse from all sources as a result of the death of the decedent. In some cases, the surviving spouse has already received the full value of the Elective Share, and in other cases there is an amount that remains that must be paid to the surviving spouse to fully satisfy the Elective Share.
To pay that portion of the Elective Share not yet paid, the Florida Probate Code sets forth an ordering of what assets are used to satisfy the Elective Share. The Florida elective share statute sets forth several classes of assets to satisfy the Elective Share, in the following order:
- Class 1: The Decedent’s probate estate and revocable trusts
- Class 2: Pay on Death, Transfer on Death and In Trust for Accounts; Property held as Joint Tenants with Right of Survivorship or Tenancy by the Entirety; life insurance cash surrender value
- Class 3: Any other property interest included in the Elective Estate computation
What assets are excluded from the Florida Elective Share calculation?
The primary asset that is excluded from the Elective Share calculation is Florida homestead property, also known as protected homestead. If the decedent owned the property in his or her name, the Homestead property is excluded from the calculation altogether, and the property passes according to Florida’s Homestead laws. If the Florida homestead property is titled jointly with the surviving spouse, the law is not clear on how this is handled. A number of practitioners believe, however, that one-half of the value of the Homestead property enters into the Elective Estate, and one-half is treated as satisfying the Elective Share – the net result being that the Homestead property can reduce the other assets that the surviving spouse receives through elective share rights. Other practitioners believe that the Florida Homestead property, whether titled in the name of the decedent only or jointly with the surviving spouse, is fully excluded from any part of the Elective Share computation.
In addition to elective share, surviving spouses in Florida receive rights to exempt property, family allowance, and intestate or pretermitted rights in some cases.
Contact me, Jeffrey Skatoff, (561) 842-4868 to discuss Florida Elective Share or any other Florida probate matter.