Elective share rules

Question 1

Old rule (decedent died before Jan 1, 2017)

Answer 1

if decedent had kids or other descendants = elective share is 1/3 of the augmented estate

If decedent had no kids or other descendants = elective share is 1/2 of the augmented estate

Question 2

Is the surviving spouse entitled to interest on the elective share ?

Answer 2

Yes, 6% stating with the date of the decedent’s death

Question 3

Do amounts that pass or will pass to the surviving spouse count against the elective share ?

Answer 3

Yes

Question 4

Wife dies on December 15, 2016 with no other descendants and left 2/3 of her augmented estate to her husband

Answer 4

The husband is entitled to nothing further under the elective share because what is left to the husband exceeds his elective share

Question 5

Wife dies on December 15, 2016 and left 1/4 to her husband

Answer 5

The husbands elective share would take him from 1.4 that his wife left to 1/2 of her augmented estate.

Question 6

What if surviving spouse disclaims the property ?

Answer 6

Then it is counted against the elective share

Question 7

Do gifts or transfers made to the surviving spouse count against the elective share ?

Answer 7

Yes

Question 8

How to pay out elective share if more than the surviving spouse got a distribution

Answer 8

every other recipient of the decedent’s augmented estate is charged pro rata

Question 9

Wife dies with no kids or other descendents and leaves husband nothing in her will. Wife leaves half of the estate to friend 1 and other half to friend 2. Husband claims elective share which is 1/2 since no kids or other descendants

Answer 9

The shares of friend 1 and friend 2 are reduced to give the husband the 1/2 he is entitled to. Husband gets 1/2 and friend 1 and friend 2 get 1/4 of the augmented estate.

Question 10

What is the augmented estate

Answer 10

The decedent’s personal estate, increased by property that the decedent’s transfers to the spouse and to third parties

Question 11

Step 1) The augmented estate beings with …..

Answer 11

The decedent’s net probate estate

Question 12

What is the net probate estate

Answer 12

the total amount that will pass by will or intestacy
-minus the family allowance
- minus exempt property
- minus funeral expense
- minus administrative expenses
-minus enforceable claims

Question 13

Is the amount of the net probate estate reduced by the amount of estate taxes that have to be paid ?

Answer 13

No

Question 14

Step 2) The net probate estate is added to the descendents augmented estate

Answer 14

which is

Any property, other than tangible personal property, that the surviving spouse received by lifetime gift or non probate transfer from the decedent (as long as property is owned by the surviving spouse at the time of the decedent’s death)

any property that the surviving spouse received by lifetime gift or nonprobate transfer and then transferred without economic consideration

Question 15

Husband and wife own a house as joint tenants with a right of survivorship. Husband dies. Wife immediately becomes the owner of the house via automatic right of survivorship.

Answer 15

The husbands interest in the house is part of his augmented estate under the elective share rules

Question 16

What is not included in the augmented estate ?

Answer 16

1. Property transferred by the decedent with the spouses written consent
2. Does not include any amount that the decedent received by gratuitous transfer from someone other than the spouse

Question 17

What must the surviving spouse do to get the elective share ?

Answer 17

Claim it

Question 18

How to claim the elective share ?

Answer 18

Claim must be filed within 6 months of the admission of the will to probate.

The deadline can be extended 90 days if there’s a suit pending to interpret the terms of the will

Question 19

The elective share rules only apply when

Answer 19

The decedent died while domiciled in VA

Question 20

New Elective Share rules apply when ?

Answer 20

When decedent dies on or after Jan 1, 2017

Question 21

What is the amount of the elective share under the new rules ?

Answer 21

1/2 of the marital property portion of the augmented estate

Question 22

What does the augmented estate consist of ?

Answer 22

1. Net probate estate-
2. Non probate transfers to the surviving spouse
3. Non probate transfers to others
4. the surviving spouses property and transfers to others

Question 23

How to calculate net probate estate ?

Answer 23

Include probate estate minus:
1. Funeral and admin expenses
2. Homestead allowance
3. Family allowance,
4. Exempt property
5. Enforceable claims

Question 24

How to calculate nonprobate transfers to SS

Answer 24

all property that is transferred from the decedent to the surviving spouse because of the decedent’s death, other then property passing by will or intestacy (life insurance)

Question 25

How to calculate Nonprobate transfers to others

Answer 25

includes property transferred to anyone other than the decedent’s estate or the SS by non probate transfer, transfers in which the decedent retained a right of possession or enjoyment, and gifts in excess of the federal gift tax within two years of the decedent’s death

Question 26

How to calculate SS property and transfer to others

Answer 26

property owned by the surviving spouse at the time of the decedent’s death (including property passing to the SS by reason of the decedent’s death)

Question 27

What is the material property portion of the augmented estate ?

Answer 27

equal to the value of the augmented estate multiplied by a percentage that increases based on how long the decedent and the surviving spouse were married to each other (SS gets 1/2 of the marital property)

Less than 1 year (3%)
Between 1 (6%) and 10 years 60%)
Between 11 and 14 years (goes up 8% every year)
15 or more years 100%

Question 28

Augmented estate exclusions

Answer 28

Property is excluded if the decedent received full consideration or the spouse joined in or consented in writing to the transfer

Question 29

How to pay out ?

Answer 29

First, from SS property, then from decedent’s probate and non probate transfers to others pro rata

Question 30

When to make claim for elective share ?

Answer 30

no later than 6 months after the decedent’s will is admitted to probate or an administrator is qualified

Question 31

Willful desertion or abandonment- What happens if SS willfully deserts or abandons the decedent and continues to do so until the death of the decedent ?

Answer 31

They are barred from taking the elective share. Remember this does not prevent the abandoned spouse from taking their share

Question 32

Wife dies when she and her husband have been married 15 years. At the time of hear death she has property worth 800k and husband has property worth 200k. There are no non probate transfers and no debts so the wifes totaal augmented estate is 1,000,000. Wife leaves her husband nothing in the will

Answer 32

Since wife and husband were married 15 years, the marital portion of the augmented estate is 100% so 1 million. Husbands elective share is 1/2 of that so 500,000.

His property is worth 200k and 100% of that is 200k since they have been married 15 years so he only gets 300k from wifes estate.

Question 33

Same facts, but husband dies instead of wife. Husbands augmented estate is 1 million. because the couple was married for 15 years the marital property is 100% of that 1 million. The wife is entitled to half which is 500k. However, she has 800k so she gets nothing.