FLORIDA ELECTIVE SHARE LITIGATION – WHAT IS THE ELECTIVE ESTATE?

The surviving spouse in Florida is entitled to a minimum share of the Estate. That concept is known as the Elective Share. If such an election is made, the Personal Representative must identity in an Elective Estate inventory the assets that are the Elective Estate so that the spouse can make a determination as to whether he or she has received the entitled 30% of the entire pot of assets subject to Elective Share.

Florida’s elective share statutes provide that the surviving spouse of a person who dies domiciled in Florida has the right to an elective share of the decedent’s estate. The elective share is an amount equal to 30 percent of the “elective estate,” which is defined to include a variety of property interests. The “augmented elective share” refers to the expanded definition of the elective estate that took effect on October 1, 2001, which broadened the amount and types of property subject to the elective share.

ASSETS THAT MAKE UP THE ELECTIVE SHARE

1. Decedent’s Probate Estate: All assets the decedent personally owned at death that require probate. Example: Personal car in decedent’s name.

2. Decedent’s Protected Homestead: The decedent’s interest in their primary residence that is protected as a homestead. Example: Family home used as the primary residence.

3. Pay On Death, Transfer On Death, In Trust For Accounts: The decedent’s share in accounts or securities designated as “Pay On Death,” “Transfer On Death,” or “In Trust For.” Example: A savings account with a “Transfer On Death” designation to a child.

4. Jointly Held Property: The decedent’s fractional interest in property owned as joint tenants with right of survivorship or tenancy by the entirety. Example: Half interest in a joint bank account.

5. Revocable Transfers: Property transferred by the decedent that remained revocable at death, excluding certain homestead and POD/TOD assets. Example: A living trust that the decedent could alter or revoke.

6. Property with Retained Life Interest or Control: Includes property transferred by the decedent but retaining a life interest, use, or control of the income/principal, or where the principal could be appointed to them. Example: A vacation home transferred to a trust but retained the right to use.

7. Life Insurance Cash Surrender Value: The decedent’s beneficial interest in the net cash surrender value of life insurance policies on their life. Example: The cash-out value of a life insurance policy.

8. Pensions, Retirement, Deferred Compensation Plans: Value of amounts payable under pension, retirement, or deferred compensation plans, with some exceptions. Example: Employer-sponsored 401(k) plan.

9. Transfers Within One Year of Death: Includes property transferred by the decedent within one year prior to death that either ended a right or interest in property or was a gift beyond certain exclusions. Example: A significant gift to a relative made nine months before death.

10. Property Transferred in Satisfaction of Elective Share: Any property transferred specifically to satisfy the elective share. Example: Assets allocated to fulfill the elective share portion of an estate.

CALCULATING THE EXEMPT SHARE

In the case of “Paredes v. McLucas” (561 So. 2d 439, Fla. Dist. Ct. App. 1990), the Florida District Court of Appeal tackled the complex task of calculating the elective share for a surviving spouse in probate law. This case is key for anyone trying to understand how to figure out the surviving spouse’s share of an estate.

The big question the court answered was about ‘exempt property’ – these are certain personal belongings of the deceased that the spouse or children can claim. The court said, “Yes, include these items in the elective share calculation.” In simple terms, when figuring out the elective share, start with almost the entire estate, including these personal items.

But, there’s a catch. Before you calculate the 30% elective share, you need to take out some expenses from the estate’s total value, like funeral costs and other debts. It’s a bit like deducting your monthly expenses from your salary to see how much you have left to spend.

The court gave a clear formula for this calculation: ES = .30 [PA – (VC + L)]. In this, ES is the Elective Share you’re trying to find, PA stands for Probate Assets (the total estate), VC means Valid Claims (like debts of the estate), and L is for any Liens on the estate assets.

Here’s an example to make it clearer. Say an estate is worth $100,000 (PA). Now, imagine there’s $20,000 in debts and funeral expenses (VC). The elective share (ES) is then 30% of the estate after these debts are paid: .30 [$100,000 – $20,000], which equals .30 [$80,000]. So, the elective share here would be $24,000.

“Paredes v. McLucas” is essential because it clarifies that the elective share should include exempt property and should be calculated after subtracting certain expenses. It’s a guide for how to fairly determine what a surviving spouse should receive from an estate, blending legal precision with practical examples.

ATTORNEY FEES AND INTEREST

The case “Blackburn v. Boulis” (184 So. 3d 565, Fla. Dist. Ct. App. 2016) primarily addresses two key issues in the context of a surviving spouse’s elective share under Florida law:

1. Interest on Elective Share: The court addressed the payment of interest on the elective share. The personal representatives (PRs) of Konstantinos Boulis’s estate were ordered to pay interest on 40% of the court-determined minimum value of the spouse’s elective share from the date the court initially valued it. This was significant because the PRs did not distribute the minimum value of the elective share until several years later. The court ruled that it would be inequitable for the spouse to be denied a reasonable return on her court-determined minimum elective share. However, the court also considered it unfair for the spouse to receive interest on the portion of the elective share value which, due to taxes, she would not retain. Thus, the court affirmed the decision to pay interest but limited it to 40% of the elective share’s value.
2. Deduction of Attorney’s Fees from Elective Share: The second major issue concerned whether the probate court could allow the deduction of a proportionate amount of attorney’s fees (incurred by the PRs to litigate estate claims) from the minimum elective share. The appellate court reversed the probate court’s decision to charge a portion of the estate’s attorney’s fees against the spouse’s elective share. The court clarified that the elective share statute (as it stood then) did not include provisions for deducting such fees from the value of the elective share. The court emphasized that the elective share is a statutory right designed to ensure provision for a surviving spouse’s needs, and the attorney’s fees incurred by PRs in estate litigation should not reduce this share

Our office litigates cases throughout Florida and we specialize in Probate and Trust Litigation. Elective Share is complicated and can be easily mishandled. If you have problems with the Elective Share in your Estate administration or believe that you might in the future we would love to help you. Give us a call for a free, no obligation consultation.

-Brice Zoecklein, Esq.

813-501-5071

Additional Articles:

Understanding Spousal Rights in Florida Probate: A Comprehensive Guide

Waiver of Spousal Rights Under Florida Probate Law

732.2035 Property entering into elective estate.—Except as provided in s. 732.2045, the elective estate consists of the sum of the values as determined under s. 732.2055 of the following property interests:

(1) The decedent’s probate estate.

(2) The decedent’s interest in property which constitutes the protected homestead of the decedent.

(3) The decedent’s ownership interest in accounts or securities registered in “Pay On Death,” “Transfer On Death,” “In Trust For,” or co-ownership with right of survivorship form. For this purpose, “decedent’s ownership interest” means, in the case of accounts or securities held in tenancy by the entirety, one-half of the value of the account or security, and in all other cases, that portion of the accounts or securities which the decedent had, immediately before death, the right to withdraw or use without the duty to account to any person.

(4) The decedent’s fractional interest in property, other than property described in subsection (3) or subsection (8), held by the decedent in joint tenancy with right of survivorship or in tenancy by the entirety. For this purpose, “decedent’s fractional interest in property” means the value of the property divided by the number of tenants.

(5) That portion of property, other than property described in subsections (2) and (3), transferred by the decedent to the extent that at the time of the decedent’s death the transfer was revocable by the decedent alone or in conjunction with any other person. This subsection does not apply to a transfer that is revocable by the decedent only with the consent of all persons having a beneficial interest in the property.

(6)(a) That portion of property, other than property described in subsection (2), subsection (4), subsection (5), or subsection (8), transferred by the decedent to the extent that at the time of the decedent’s death:

1. The decedent possessed the right to, or in fact enjoyed the possession or use of, the income or principal of the property; or

2. The principal of the property could, in the discretion of any person other than the spouse of the decedent, be distributed or appointed to or for the benefit of the decedent.

In the application of this subsection, a right to payments under a commercial or private annuity, an annuity trust, a unitrust, or a similar arrangement shall be treated as a right to that portion of the income of the property necessary to equal the annuity, unitrust, or other payment.

(b) The amount included under this subsection is:

1. With respect to subparagraph (a)1., the value of the portion of the property to which the decedent’s right or enjoyment related, to the extent the portion passed to or for the benefit of any person other than the decedent’s probate estate; and

2. With respect to subparagraph (a)2., the value of the portion subject to the discretion, to the extent the portion passed to or for the benefit of any person other than the decedent’s probate estate.

(c) This subsection does not apply to any property if the decedent’s only interests in the property are that:

1. The property could be distributed to or for the benefit of the decedent only with the consent of all persons having a beneficial interest in the property; or

2. The income or principal of the property could be distributed to or for the benefit of the decedent only through the exercise or in default of an exercise of a general power of appointment held by any person other than the decedent; or

3. The income or principal of the property is or could be distributed in satisfaction of the decedent’s obligation of support; or

4. The decedent had a contingent right to receive principal, other than at the discretion of any person, which contingency was beyond the control of the decedent and which had not in fact occurred at the decedent’s death.

(7) The decedent’s beneficial interest in the net cash surrender value immediately before death of any policy of insurance on the decedent’s life.

(8) The value of amounts payable to or for the benefit of any person by reason of surviving the decedent under any public or private pension, retirement, or deferred compensation plan, or any similar arrangement, other than benefits payable under the federal Railroad Retirement Act or the federal Social Security System. In the case of a defined contribution plan as defined in s. 414(i) of the Internal Revenue Code of 1986, as amended, this subsection shall not apply to the excess of the proceeds of any insurance policy on the decedent’s life over the net cash surrender value of the policy immediately before the decedent’s death.

(9) Property that was transferred during the 1-year period preceding the decedent’s death as a result of a transfer by the decedent if the transfer was either of the following types:

(a) Any property transferred as a result of the termination of a right or interest in, or power over, property that would have been included in the elective estate under subsection (5) or subsection (6) if the right, interest, or power had not terminated until the decedent’s death.

(b) Any transfer of property to the extent not otherwise included in the elective estate, made to or for the benefit of any person, except:

1. Any transfer of property for medical or educational expenses to the extent it qualifies for exclusion from the United States gift tax under s. 2503(e) of the Internal Revenue Code, as amended; and

2. After the application of subparagraph 1., the first annual exclusion amount of property transferred to or for the benefit of each donee during the 1-year period, but only to the extent the transfer qualifies for exclusion from the United States gift tax under s. 2503(b) or (c) of the Internal Revenue Code, as amended. For purposes of this subparagraph, the term “annual exclusion amount” means the amount of one annual exclusion under s. 2503(b) or (c) of the Internal Revenue Code, as amended.

(c) Except as provided in paragraph (d), for purposes of this subsection:

1. A “termination” with respect to a right or interest in property occurs when the decedent transfers or relinquishes the right or interest, and, with respect to a power over property, a termination occurs when the power terminates by exercise, release, lapse, default, or otherwise.

2. A distribution from a trust the income or principal of which is subject to subsection (5), subsection (6), or subsection (10) shall be treated as a transfer of property by the decedent and not as a termination of a right or interest in, or a power over, property.

(d) Notwithstanding anything in paragraph (c) to the contrary:

1. A “termination” with respect to a right or interest in property does not occur when the right or interest terminates by the terms of the governing instrument unless the termination is determined by reference to the death of the decedent and the court finds that a principal purpose for the terms of the instrument relating to the termination was avoidance of the elective share.

2. A distribution from a trust is not subject to this subsection if the distribution is required by the terms of the governing instrument unless the event triggering the distribution is determined by reference to the death of the decedent and the court finds that a principal purpose of the terms of the governing instrument relating to the distribution is avoidance of the elective share.

(10) Property transferred in satisfaction of the elective share.

Disclaimer:   The information contained in this blog/website is for informational purposes only and provides general information about the law but not specific advice.  This information should not be used as a substitute for advice from competent legal counsel as laws change and the facts in your specific case need to be analyzed