Spouse’s Elective Share (Portfolio 841)

Description

Tax Management Portfolio, Spouse’s Elective Share, No. 841 T.M., is a detailed study of the state law right granted to a surviving spouse to reject a deceased spouse’s estate plan in favor of a statutorily determined share of that decedent’s estate. The portfolio analyzes the origin and policy underpinnings of the spouse’s entitlement, compares the elective share to community property, and addresses the dissonance between a spouse’s marital property entitlement on termination of a marriage inter vivos (dissolution) versus at death (the elective share).

State elective share statutes grant surviving spouses very different rights in the 41 noncommunity property states, with a relatively wide variation in the manner in which the right of election is calculated and then satisfied. The portfolio compares three representative state laws, one being the augmented probate estate concept contained in the Uniform Probate Code (UPC), which aims to divide marital property equitably between spouses. It ensures that a surviving spouse receives an amount equal to the state-mandated entitlement. It also helps to protect against a surviving spouse being disfranchised entirely by the decedent’s plan. Some state laws make it easier, compared to the UPC, for a decedent to disinherit a surviving spouse, notwithstanding the statutory construct. Finally, the portfolio explains how many state laws make it possible for a surviving spouse to receive more than the share that the legislature or the decedent intended.

The portfolio also explores questions relating to the tax consequences of the right of election, mechanisms that are effective to preclude a surviving spouse from defeating the decedent’s testamentary intent, conflict of laws and conflict of interest issues that must be considered, and the consequences of a spouse’s election on other beneficiaries of the decedent’s estate.

This Portfolio may be cited as Pennell, Cline, and Turnipseed, 841 T.M., Spouse’s Elective Share.

Table of Contents

I. Introduction
II. Policy Concerns Over the Elective Share
III. Representative Elective Share Statutes
IV. Related Relevant Uniform Acts
V. Tax Consequences of Elective Share Statutes
VI. Planning to Minimize an Elective Share
VII. Impact on Other Beneficiaries
VIII. Conflict of Laws Aspects
IX. Conflicts of Interest