In Florida, can a spouse be disinherited?
Several years ago, the Florida Legislature enacted HB 301 effective October 1, 1999, for decedents dying on or after October 1, 2001 (known as the elective share statute). This law changed a long-standing rule that spouses could be disinherited. Florida courts now repeatedly interpret and apply the new elective share statute in a manner consistent with the recognized strong public policy favoring the protection of the surviving spouse against being disinherited.
The question often arises as to whether assets placed by a decedent into an irrevocable trust are subject to a claim by the surviving spouse under the new elective share statute. The answer depends on the specific facts of each case and on a court’s understanding of what assets constitute the decedent’s “probate estate.” First, one must analyze the definitions written into law by our elected officials in Tallahassee and Washington.
In Florida, the elective estate includes the value of Decedent’s “probate estate.” The term “probate estate” is defined as “[a]ll property wherever located that is subject to estate administration in the District of Columbia or in any state of the United States.” The framers of the Florida elective share statute had the decedent’s “gross estate” for purposes of the federal estate tax, in mind when they drafted the definition of “probate estate.” “Gross estate” was defined by Congress to include property disposed of by a decedent, during his lifetime but where the decedent retains “possession or enjoyment” of until death. Similarly, the Florida statute includes property in the elective estate if at the time of death the decedent retained “the right to, or in fact enjoyed the possession or use of, the income or principal of the property.” Most of the Florida probate cases litigated under the elective share statute involve factual disputes in connection with whether or not the decedent retained possession of or enjoyment of the assets in the irrevocable trust at the time of death.
In other words, simply because the decedent may have called the assets irrevocable during his life does not necessarily mean that they will not be counted or included in the elective share calculation if he in fact enjoyed those assets during his lifetime. For example, if a spouse transferred assets into an irrevocable trust, and then continued to make withdrawals or had access to those funds, then an argument could be made that those assets should be included in the calculation of the elective share after the spouse’s death. A similar argument could be made for real estate or personal property transferred into an irrevocable trust but still used or accessed or controlled, directly or indirectly by the spouse during their lifetime. Sometimes, a disgruntled spouse will attempt to disinherit his spouse by transferring real estate and personal property into an irrevocable trust.
While the legislature’s current version of the elective share statute is less than perfect, a round of applause to the Florida legislature is in order for its enactment of Fla. Stat. § 732.2025(7) which extends Florida’s elective share to real estate that is subject to administration in other states. The purpose of this extension was to “prevent avoidance of the elective share through investments in out-of-state real property and is consistent with the Uniform Probate Code and other modern elective share provisions.”