Elective Share and Spousal RightsJeffrey S. GoetheBarnes Walker, Goethe, Hoonhout, Perron & Shea, PLLC3119 Manatee Avenue WestBradenton, Florida 34205(941-741-8224)jgoethe@barneswalker.com

Introduction • A. Who is a Surviving Spouse?

437

Marriage

Other Jurisdictions

Divorce• Wills & Trusts• POA’s• IRA’s, POD,

Insurance

Separation

Domestic Partnership

Florida

Dissolution

Fraudulent Marriages

§ 732.805

Annulment

Waivers

Prenuptials

Post-nuptials

§ 732.702

Deeds?

437

1.a. Requirements Under Florida Law• § 741.04 – Application

• With premarital preparation course – effective immediately• Without premarital preparation course – 3 day delay• Male & Female (2018 FL SB 140)• Over 18, unless…. (2018 FL SB 140)

• § 741.01 – License issued by county judge or clerk• § 741.041 – License is valid for 60 days• § 741.07 – Ceremony by clergy, judge, clerk, notary• § 741.08 – Certificate of solemnization within 10 days & return

to clerk or county judge.

• Hall v. Maal, 32 So. 3d 682 (Fla. 1st DCA 2010)

1. b. Same Sex Marriages & Civil Unions

• Prohibition Against Same-Sex Marriages is unconstitutional.• Windsor v. U.S. - Estate Tax Return• Pedersen, et. al. v. Office of Personnel Management • O’Connor v. Tobits – ERISA• Obergefell v. Hodges – fundamental right to marry• Senate Bill 2017 – 1774 would have repealed §742.212• Senate Bill 2018 – 130 would have repealed §742.212

• A “Marriage” is still required, as opposed to a civil union.• Cohen v. Shushan, 212 So. 3d 1113 (Fla. 2d DCA 2017)

448

1. c. Divorce• Final Judgment

• Effect: • No surviving spouse• § 732.507(2) – Wills• 736.1105 – Trusts• § 732.703 – Life insurance, TOD, POD, & retirement plans• § 689.15 – TBE becomes TIC

1.d. Common Law Marriage• § 741.21 – Common law marriages void after 01/01/1968

• Pierre v. Trelles (In re Estate of Sterile), 902 So.2d 915 (Fla. 2nd

D.C.A. 2005) – Haiti

• American Airlines, Inc. v. Mejia, 766 So. 2d 305 (Fla. 4th D.C.A. 2000) - Columbia

1.e. Reputed Spouses• Cohen v. Shusan, 212 So. 3d 1113, (Fla. 2d DCA 2017)

• Israeli law requires a religious ceremony for a valid marriage

• Compliance with the civil requirements results in a “reputed spouse” relationship

• Florida law requires a marital relationship

1.f . Separation1.g. Annulment• Separation ≠ Divorce

• Kuehmsted v. Turnwall, 103 Fla. 1180, 138 So. 775 (Fla. 1932)• Void ab initio

1.h. Simultaneous Death Act§ 732.601 - Simultaneous Death LawUnless a contrary intention appears in the governing instrument:(1) Title to depends on priority of death(2) Designated beneficiaries take property of another

depending upon survivorship(3) Joint Tenants / Tenants by the entireties(4) Insured and beneficiary of life insurance policy

• NOTE: Family allowance for spouse and elective share rights end with surviving spouse’s death.

• Homestead, family allowance for dependents and exempt property do not.

444

Simultaneous Death Act

1.i. Guardianship Statutes• Smith v. Smith, 224 So. 3d 740 (Fla. 2017) – if the right to

contract has been removed, court approval required.

• § 744.3725 – Guardian can seek dissolution of marriage

• Laws of Fla. 2017-16 – spouse’s consent no longer required

1.j. Fraudulent and Void Marriages• Section 732.805 - 2010• Marriage procured by fraud, duress or undue influence is not

entitled to: • Rights under the Probate Code (elective share, family allowance,

preference as PR; intestate rights; homestead; exempt property; pretermitted spouse;

• Bond, life insurance, or other contract, unless spouse is provided for by name;

• Will, trust, power of appointment, unless provided for by name;• Immunity from the presumption against undue influence by

spouse.

1.j. Fraudulent and Void Marriages• Unless

• decedent voluntarily resided with spouse “with full knowledge of the facts constituting the fraud, duress or undue influence; or

• Both spouses otherwise subsequently ratified the marriage.

• Spouse is treated as predeceased.

1.k. Slayer Statute• Section 732.802 – “all rights”• Section 736.1104• File v. Hoffman, 169 So. 3d 1274 (Fla. 4th DCA 2015)– children

and grandchildren of killer still inherit.

• §733.105; Rule 5.385- Petition to Determine Beneficiaries• §86.041 - Actions by executors, administrators, trustees, etc.

A. 2. Waiver of Marital Rights• Section 732.702

• Written• Two witnesses• “All rights”• Prenuptial – no disclosure; Postnuptial – disclosure• Counsel

• City Nat’l Bank of Fla. V. Tescher, 578 So. 2d 701, 703 (Fla. 1991)

• Deeds as homestead waivers:• Stone v. Stone, 157 So.3d 295, 304, (Fla. 4th DCA 2014)• Lyons v. Lyons, 155 So.3d 1179, 1181 (Fla. 4th DCA 2014)

732.2075 –Waiver of Homestead Rights(Senate Bill 2018 – CS 512)

• Section 1. Section 732.7025, Florida Statutes, is created to read:

• 732.7025 Waiver of homestead rights through deed.—

• (1) A spouse waives his or her rights as a surviving spouse with respect to the devise restrictions under s. 4(c), Art. X of the State Constitution if the following or substantially similar language is included in a deed: “By executing or joining this deed, I intend to waive homestead rights that would otherwise prevent my spouse from devising the homestead property described in this deed to someone other than me.”

732.2075 –Waiver of Homestead Rights(Senate Bill 2018 – CS 512)

• (2) The waiver language in subsection (1) may not be considered a waiver of the protection against the owner’s creditor claims during the owner’s lifetime and after death. Such language may not be considered a waiver of the restrictions against alienation by mortgage, sale, gift, or deed without the joinder of the owner’s spouse.

• Section 2. This act shall take effect July 1, 2018.

Validity of a Waiver• Don King Productions, Inc. v. Chavez, 717 So.2d 1094 (1998) A

statutory presumption is considered to be a rebuttable presumption.

• Estate of Roberts, 388 So. 2d 216, 217 (Fla. 1980) An irrebuttable or conclusive presumption would render the proposed statute unconstitutional. (addressing F.S. 732.702)

• Chames v. DeMayo, 972 So. 2d 850 (Fla. 2007) – A waiver of homestead rights is not purely personal.

• Chames v. DeMayo, 972 So. 2d at 861 (Fla. 2007). A waiver of a constitutional right “must be made knowingly, voluntarily, and intelligently.”

B. Rights of a Surviving Spouse

Surviving Spouse Rights

Intestate Share § 732.102

Elective Share § 732.201-732.2155

Pretermitted Share § 732.301

Homestead Art. X, s. 4 § 732.401

Exempt Property § 732.402

Family Allowance § 732.403

Appointment as PR § 733.301

B. 1. Intestate ShareSpouse’s Intestate Share

Before 10/1/11 On or After 10/1/11

(1) No surviving descendants of the

decedent.

100% 100%

(2) All of Decedent’s descendants are

also the only descendants of

surviving spouse.

The first $60,000, plus 50% of the

balance

100%

(3) At least one of the decedent’s

descendants is not a descendant of

the surviving spouse.

50% 50%

(4) At least one of the surviving

spouse’s descendants is not a

descendant of the surviving spouse

If all of decedent’s descendants were

also descendants of the spouse, the first

$60,000, plus 50% of the balance;

otherwise, 50%.

50%

B. 1. a. Spouse’s Intestate Share

• The Brady Bunch – 50%

• The Waltons - $60,000 + 50%

• The Goethes - 100%

• Homestead – Life Estate or 50%

B.1.b. Procedure• § 733.105 Determination of Beneficiaries

• Formal Notice• Probate Rules• In rem jurisdiction

• § 86.041 Actions by executors, administrators, trustees, etc.• Summons• Civil Rules • In personam jurisdiction

• Rule 5.385 Determination of Beneficiaries and Shares

B.2. Pretermitted Share

If Testator makes will

beforemarriage, then

Spouse receives

intestate share unless:

Spouse is provided for by• Prenuptial or

Postnuptial; or• Will; or• intentional

omission.

Pretermitted Share• Policy – protect against forgetful spouses• § 732.310

• Marriage after the will is executed• Intestate share• Exceptions:

• Waiver• Spouse is provided for• Will discloses and intent to exclude spouse

• Pour-over wills?• 100% to spouse?

Homestead, Exempt Property & Family Allowance

732.2105 Elective Share is in addition

to other rights

Until July 1, 2017

2017 Amendment

Homestead is part of the

elective estate

B.3. Homestead, Exempt Property & Family Allowance

HomesteadExcluded from

the Elective Estate (until

7/1/17)

Does not count toward

satisfaction (until 7/1/17)

Exempt from claims and admin. Exp.

Exempt Property

Excluded from the Elective

Estate

Does not count toward

satisfaction

Subject to Admin. Exp., but

not claims

Family Allowance

Included in the Elective Estate

Does not count toward

satisfaction Class 5 claim

TBE, JTWRSDecedent’s

share included in the Elective

Estate

Decedent’s share counts

toward satisfaction

Not subject to claims or admin.

Exp.

B. 4. Exempt Property § 732.402

RequirementsFlorida

resident Decedent

Spouse or children

Property Protected

Furniture $20,000

Two Motor Vehicles

Prepaid College

Section 119.1915 Benefits

477

Exempt Property § 732.402

Specific / Demonstrative

Devise

All my household

goods

No Restrictions

Priority All claims

Except perfected security interests

Exempt Property § 732.402 -Procedure

Waiver 4 months 40 days Pre or Post Nuptial

483

Exempt Property § 732.402• Rule 5.406. Proceedings to determine exempt property• Interested persons

• Beneficiaries• Creditors

• § 733.301 Disposition without administration• Rule 5.240• *Not exempt from administration expenses, which are not a

“claim.”

B.5. Other Rights –Family Allowance

Paid out of Elective Estate

Not counted toward

satisfaction

Up to $18,000

Class 5 claim

487

Rule 5.407§ 732.403

B.6. Community Property• 732.218 Rebuttable presumptions.• 732.219 Disposition upon death.• 732.221 Perfection of title of personal representative or

beneficiary. • 732.223 Perfection of title of surviving spouse.

490

B.7. The Elective Share:

Election

Entitlement

Elective Estate

Elective Share Amount

Satisfaction

492

7.a.i. Applicable Law –

Prior to 1/1/76•Dower and Curtesy

Between 1/1/76 and 9/30/2001

•Elective Share

After 10/1/01•New Elective Share

After 7/1/17•The New, New Elective Share

Applicable Law

Before 10/1/01

4 months to elect

30% of the ProbateEstate

After 10/1/01

6 months to elect

30% of the ElectiveEstate

After 7/1/17

6 months to elect, plus 40 days in

some cases

30% of the elective estate, including

protected homestead

Applicable Law§ 732.2155

Effective 10/1/99

Death on or after 10/1/01

Prior waivers

Elective share trusts

Irrevocable Contracts

Property in trust since 10/1/99

§ 732.2151 732.2151 - Fees and Costs• Actions commenced on or after

7/1/17

All other amendments – death after 7/1/2017

7.a.ii. Elective Share Terms

§ 732.2025

Direct Recipient

Elective Share Trust

Governing Instrument

Probate Estate

7.a.iii. Representing the Personal Representative

Personal Representative’s Duties

Fiduciary Duties

Interested Persons

Inform and Account

Conflict Rules

Section 90.5021

(FINALLY!)

Ethics Opinions

Probate Code

7.b.Entitlement

Entitlement• The surviving spouse of a Florida resident• Who has not waived his or her right to make the election• Who makes a timely election

Who May Make the Election

Surviving Spouse of a

Florida resident

With Court Approval: • Attorney in fact• Guardian of

Surviving Spouse

NOT:• The personal

representative of the surviving spouse

7.c. Making the Election

• Election - § 732.2135 – 6 months after service of NOA or 2 years • Extension – Request within 6 months after serve40 days after the

conclusion of proceedings that affect the spouse’s interests, but no more than 2 years.

• Guardian or attorney in fact must petition, then elect• Petition for authority to elect tolls time• Consideration of spouse’s reasonable life expectancy• No election by spouse’s estate

• Day 21 - PR serves notice of election – within 20 days• Day 41 - Objections due within 20 days of notice• Day 41 - Order Determining Entitlement• Day 101 - Elective Estate Inventory within 60 days• Day 131 - Petition to Determine Amount within 90 days• Day 151 - Order Determining Amount

180

201

242

281311331

7.d. What Counts? Property in the Elective Estate

The Elective Estate

What Counts? (§ 732.2035)

• Probate estate• Protected Homestead – after July 1, 2017• POD TOD ITF• Fractional interest in TBE and JTWRS• Revocable transfers• Retained right to principal or income• Retirement and pensions• Transfers within 1 year of death (except med/ed/annual

exclusion)• Property transferred in satisfaction of the Elective Share

The Elective Estate

What’s Excluded? (section 732.2045)

• Irrevocable transfers prior to 10/1/2000 (but elective share trusts count)

• Transfers for adequate consideration• Transfers with spouse’s consent • Proceeds of life insurance in excess of cash value• Court-ordered life insurance• Decedent’s ½ of community property• Qualifying special needs trusts• General Power of Appt. • Protected homestead (UNTIL 7/1/17)• Protected homestead with waiver & no devise to spouse (AFTER

7/1/17)

Valuation of Elective Estate Assets

§73

2.20

55

(1) Life insurance payable on death(2) Life insurance transferred within 1 year of death(3) Pension & retirement benefits(4) Other transfers within 1 year of death(5) All other property

Valu

atio

n (1) Net cash surrender value prior to death(2) Surrender value at time of transfer(3) Transfer tax value on date of death(4) FMV on date of transfer, less encumbrances(5) FMV on date of death, less claims, liens, mortgages, etc.

Valuation of Homestead After July 1 - 2017

§73

2.20

55(1

)(a) (1) Fee

Simple(2) Life Estate

(3) Waiver + GiftNot TBE or JTWRS

Valu

atio

n (1) Fair Market Value(2) 50% of FMV(3) FMV on DOD* Net Value.

Elective Estate Inventory

Lot 1, Block 2, SUNNY ACRES SUBDIVISION…. 100.00% $1,000,000

.00

$1,000,000.00

TOTAL VALUE OF F.S. 732.2035(2) PROPERTY: $1,000,000.00

Description

Decedent’s

Fractional

Interest

Total

Value of

Asset

Date of Death

Value for

Decedent’s Share

Lot 1, Block 2, SUNNY ACRES SUBDIVISION…. 100.00% $1,000,0

00.00

$1,000,000.00TOTAL VALUE OF F.S. 732.2035(2) PROPERTY: $1,000,000.00

United Engineers Association Savings Account POD to Peter

Brady

100.00% $1,000,000.

00

$1,000,000.00

TOTAL VALUE OF F.S. 732.2035(3) PROPERTY: $1,000,000.00

Summary

The Elective Estate

Overlapping Application §732.20235(2)

§ 732.2035(2) (TOD/POD/ITF) is moved up to 732.2035(1)

(probate) if it could be included in both.

Tie goes to the spouse

The Amount of the Elective Share

Total Value of the

Elective Estate

Minus All Valid

Claims*

Minus Mortgages,

Liens, or Security Interests

X 30% =Elective Share

Amount

513

*Administration expenses are not claims

• Blackburn v. Boulis, 184 So.3d 365 (Fla. 4th DCA 2016)• Claims reduce the elective estate. • Estate Tax Appointment under § 733.817 applies• Attorneys fees do not. • Spouse received interest for delay in satisfaction

7.f. Satisfaction of the Elective Share Amount

514

Satisfaction of the Elective Share

§ 732.2075 - Sources of payment & abatement

The spouse is first credited for what he or she received under the will, trust, TOD, TBE, JTWRS, HOMESTEAD, etc.

For the UNSATISFIED BALANCE, § 732.2075 – class priority

Apportionment within classes

Assets received by the spouse outside the elective estate don’t count toward satisfaction.

Comparable to creditor claims

Unsatisfied Balance

Class 1• Probate & Rev. Trust

Class 2• IRA/401K/POD/ITF/Survivorship (732.2035(2))• TBE / JTWRS (732.2035(3))• Insurance Cash Surrender Value (732.2035(6)

Class 3• All other interests other than protected charitable

interests

Class 4• Protected charitable interests, but only to the extent

charitable deduction is not jeopardized.

• Life insurance payable to spouse (policy not owned by spouse)

• Decedent’s ½ of community property• Special needs trust for spouse• Elective share trust• Property that would have satisfied

elective share but is disclaimed• Homestead passing to spouse

(7/1/17)

Assets Passing

to Spouse

Valuation

§ 732.2095

Valuation Dates Special Valuation Rules

The Surviving Spouse’s Elective Share

• Contribution by direct recipients: 732.2085• Probate is an in rem proceeding• Separate civil action is probably needed to force contribution

of non-probate assets• PR may be relieved of duty to compel contribution• Spouse may pursue contribution• Interest can be awarded if not paid within 2 years of DOD.

524S

The Surviving Spouse’s Elective Share

• Protection of Payors and Third Parties• 732.2115• Third parties may rely upon the governing instrument• Fund Title Notes / Probate Code

Determining Whether the Election Should be Made

Should the Spouse Make the Election?

• Withdrawal of the Election• The earlier of Eight months from death or• Order of Contribution

• Extension of Time – Later of • 6 months from service of Notice of Administration or 2 years

from date of death if no service• 40 days after conclusion of proceedings

• 2009 Law:• Court may assess fees upon finding of bad faith• Encourages spouse to withdraw election• Does not punish spouse for making election

Should the Spouse Make the Election?

• 2016 Legislation • The election is a “floor”, not a “cap.”• The spouse is not treated as predeceased.

• 2017 Legislation• Fees assessed only when election is made in bad faith.

Discovery

Discovery• Depositions• Interrogatories• Request for Production

• Party• Nonparty

• Request for Admissions

Forms• Notice of Administration• Election• Notice of Election • Proof of Service of Election• Order Determining Entitlement• Elective Share Inventory• Petition to Determine Amount

Other Rights –DSUEA

Expires 12/31/12 Requires “timely-filed 706”

Benefits surviving spouse’s estate

Who pays for 706?

Portability

Other Rights• Ad Valorem Property Taxes• § 225.15 – Final Paychecks• § 768.21 – Wrongful death claims• § 440.16 – Death benefits under Workers Comp

Law• § 295.01 – Education for Veterans’ children• § 112.19 – Surviving spouses of law enforcement

& corrections officers

Other Rights• § 112.191 – Surviving spouses firefighters• § 736.0503 - Exceptions to spendthrift

provision• § 319.28 – Motor vehicle & mobile home titles• § 735.302 – Income tax refunds• § 408.051 - Access to Electronic Health Records• § 742.17 - Genetic Material

• Thank you!