The Elder Law Forum by Professor Michael Myers Mice, Men and the Spousal Elective Share
In his book Of Mice and Men, John Steinbeck wrote, "The best laid plans of mice and men often go astray." That is particularly true for persons without wills who rely instead upon joint-ownership with rights of survivorship to pass on their property.
That is the strategy adopted by a USD Senior Legal Helpline caller (1-800-747-1895; email@example.com). He is 70; his wife is 55. Neither have a will.
Both have grown children from previous marriages. They have placed their assets in survivorship, payable-upon-death. Their home is in the wife's name in a life estate to go to her children.
He has a certificate-of-deposit, with survivorship to his wife, for funeral expenses. He maintains a savings account with a balance "close to what I would want to leave her." The rest of his certificate-of-deposits are payable upon death to his children in equal shares. Three older, well-conditioned vehicles are titled in his wife's name.
He asked: "Should I pass on, would things work out the way they are without problems? Or is there a surviving spouse right to a percentage of assets which should somehow be waived? We are both satisfied with the way we have it set up and wouldn't want a state law to dictate something else. Is there such a law?"
There is. It is the "spousal elective share" statute, which gives the surviving spouse a percentage of the decedent's "augmented estate," which includes non-probate transfers to others. The share ranges from 3 percent, if married less than two years, to 50 percent if married 15 years or more.
What's wrong with the caller's plan? First it assumes he will die first. If his wife dies first, he will have no legal right to remain in their home. If he does die first, his wife will be entitled to her elective share of his augmented estate. Further, it makes no provision for decision-making should one or both become incapacitated.
They should (a) engage a lawyer, (b) execute wills, (c) execute an agreement waiving their spousal elective share, and (d) assume that he may or may not predecease his wife. And, oh yes, they should take time to re-read Steinbeck's Of Mice and Men.