I recently prepared an estate plan for a client who had, for various reasons, never finalized her divorce with the father of her children. In preparing her will, she wanted to have her estate divided between her children but was completely unaware that her estranged husband might have a spouse’s elective share claim.
What is a spouse’s elective share?
A spouse’s elective share is a portion of a decedent’s estate to which a spouse is statutorily entitled. While the surviving spouse is not required to exercise this election, one cannot sever them from the right to do so unless there is a valid waiver in place specifically waiving the right such as a prenuptial or postnuptial agreement. A surviving spouse may exercise this right if the decedent died intestate (without a will), left them out of the will entirely, or did not leave as much as they can claim under the elective share.
Recent Changes in Virginia’s spousal elective share
Historically, the laws governing a spouse’s elective share in Virginia were located at § 64.2-300, et seq. of the Code of Virginia. Under that now-superceded version of the law, the spouse of a decedent was entitled to “(i) one-third of the decedent’s augmented estate if the decedent left surviving children or their descendants or (ii) one-half of the decedent’s augmented estate if the decedent left no surviving children or their descendants.”
In my client’s case, since she has surviving children, the old rules would have conceivably allowed her husband to claim one-third of her augmented estate.
During the 2016 legislative session House Bill 231 and Senate Bill 181 were passed, changing a number of provisions in this area of law. These changes took effect on January 1, 2017. The laws governing a spouse’s elective share are now located at § 64.2-308.1, et seq.
In the new version, a spouse is entitled to “take an elective-share amount equal to 50 percent of the value of the marital-property portion of the augmented estate.”
So in my client’s case, the new rules would conceivably allow her husband to claim one-half of the marital-property portion of her augmented estate.
What is an augmented estate?
This term is used in both the old and new versions of the elective share laws. However, the list of those assets that comprise the augmented estate also changed on January 1, 2017.
A point-by-point comparison of the differences is beyond the scope of this article. However, the important thing to note is that, under the new definition, the augmented estate includes the decedent’s non-probate transfers to others. This would include assets passing outside of probate to the beneficiaries of revocable trusts, transfer-on-death deeds, and other assets with direct benificiary designations.
Complicating matters, there is a percentage allocation table which requires a couple to have been married 15 years in order for a surviving spouse to get credit for 100% of the value.
When is a surviving spouse not entitled to an elective share?
There are a number of defenses to a spousal election. The first is that the right was somehow waived, perhaps in a prenuptial or postnuptial agreement, a separation agreement, or some other waiver standing alone. The second occurs when the surviving spouse “deserts or abandons the other spouse and such desertion or abandonment continues until the death of the [decedent].”
What does this mean to the average person?
It means that the legal framework surrounding each step in your life is important.
It means that you should consider a prenuptial agreement prior to marriage to insure that both parties fully understand how they are going to handle the financial aspects of their marriage and any possible separation or divorce.
If you are already married and wish to make such decisions then perhaps a postnuptial agreement is in order.
If you are going to separate but remain married, then you should consider adding language to the separation agreement addressing spousal elective share.
Finally, estate planning should be a part of your life at every stage, and should be revisited as your circumstances change (children born or adopted, marriage, divorce, and the passing of loved ones). Make sure the assets you worked so hard to earn are left to those you truly want to receive them.
Disclaimer: This information is presented for educational purposes only and does not give rise to an attorney-client relationship. Additionally, I am licensed to practice law in the Commonwealth of Virginia and this answer may not be appropriate for other states.