Passing Property to a Spouse? Here is a Rundown of Rules Governing What Happens

In all but one of the fifty states, you cannot disinherit a spouse.  In Georgia it is permitted.

If you leave a will that makes little or no provision for your surviving spouse, or if you have arranged title of assets so that there is no probate estate, your surviving spouse is entitled to elect a statutory forced share.

The spouse is entitled to one-third of various property interests of the decedent.

It is the policy of the law to make sure that a surviving spouse does not become impoverished because of the loss of the support of the deceased spouse as well as to reward the spouse's contribution to the financial success of the marriage.  For an example, in Pennsylvania, the survivor is entitled to what our legislature has determined to be a "reasonable" share, that is, one-third (1/3).

Whether the marriage lasts for one hour or fifty (50) years, the elective share is and remains one-third (1/3).

The share is not
limited to property acquired after the marriage, but applies to all of the decedent's property interests including gifts and inheritances.

The share is not paid automatically.  There are specific procedural requirements.  To claim the share the surviving spouse must "elect" to take the share.  The surviving spouse is entitled to this one-third (1/3) even if divorce proceedings are pending, or even if the spouses have been estranged and living apart for years. The spouse has six months from the later of the date of death or the date of probate to make this election.  The election is made by filing a claim with the Clerk of the Orphan's Court in the county of the decedent's domicile.

If there is a pre-nuptial agreement or post-nuptial agreement, often the spouses waive the right to make this election.

That solves the problem.  But many times such an agreement is not a practical solution, or is personally unacceptable to the parties to the marriage.

What are the property interests
that a surviving spouse can reach?

In general, these are property interests that were either owned by the decedent at death, or were transferred by the decedent during life but from which the decedent had the right to withdraw income or principal.

Let's look specifically at what types of property are subject to the spouse's election:

  • Probate property--that is--property that passes under the decedent's will, or if there is no will, property that passes by intestacy.
  • Property from which the decedent was entitled to receive the income if that property was transferred by the decedent during the marriage.
  • Property transferred by the decedent during life where the decedent could revoke the transfer and get the property back, or could withdraw or invade the principal of the property for the decedent's own benefit.  This applies whether the transfer was made before or after the marriage.
  • Joint property owned with another to the
    extent the decedent could have conveyed or revoked the entire joint account.  For example, a joint bank account can be closed by either owner.  Thus, a surviving spouse could elect a share of the entire joint bank account.
  • Annuity payments to the extent the annuity was purchased during the marriage and the decedent was receiving payments.
  • Gifts made within one year of death to the extent they exceed $3,000 per beneficiary.
  • The following property interests are not subject to the election:
  • Any transfer made with the consent of the surviving spouse
  • Life insurance on the decedent's life
  • Retirement plans.

If the surviving spouses makes the election to take the one-third (1/3) share, then he or she gives up any other provisions that were made for him or her.  Making the election is considered to be a disclaimer of all benefits passing to the surviving spouse under the will.

In other words, you can't keep what
the first spouse gave you and get a one-third (1/3) share.  You have a choice: You can keep what you got, or you can give up what you got and elect a one-third (1/3) share.

What do you have to give up if you elect to take one-third?

  • all items passing to the surviving spouse by will or intestacy
  • any interest as a beneficiary in a trust created by the decedent
  • proceeds of insurance to the extent premiums were paid by the decedent or his or her employer
  • annuities
  • retirement plans
  • joint property owned by the decedent and surviving spouse to the extent it is attributable to contributions from the decedent.  Any gifts made by the decedent to the surviving spouse during life are an offset against the elective share.

Obviously, this is a complicated analysis.  If you are a surviving spouse, determining whether or not you should elect your one-third (1/3) share is a many-faceted decision.  You
will need competent advice from an attorney if you are faced with this decision.  Similarly, for a spouse who is intent on reducing the value of the effective share, there are steps that can be taken such as maximizing the investment of assets in property not subject to election (retirement plans are a good example; insurance is another example).

It is not uncommon for a spouse to be afraid that her surviving spouse will wreak havoc with the intended distribution of assets.  For  example, what if the deceased spouse was a business owner who intended to pass the business to her children from a prior marriage.  This plan could be destroyed if the surviving spouse "elects" to take one-third of the assets, thus defeating the plan.  For this reason, it is very important that the estate planner take steps to ensure that the business owner's intentions are carried out.

The elective share is another example of restrictions on the disposition of property imposed by the legislatures.   It may give
options, or hope, to someone who otherwise is cut off.  On the other hand, it may make it impossible to carry out the intentions of a person as expressed in his or her will.  The example discussed in this article is for Pennsylvania.  Each state has its own different, but similar laws.  If you are involved in a situation where this may be an issue, you need to seek competent professional advice.


Patti S. Spencer, Esq., is a nationally recognized trusts and estates attorney and author. Her areas of concentration include trusts, estate administration, estate settlement, estate planning, inheritance tax, and tax planning. She is the founder of Spencer Law Firm in Lancaster, Pennsylvania, and a Fellow of the American College of Trust and Estate Counsel (ACTEC). Before founding Spencer Law Firm in 1996, Ms. Spencer was the head of the Personal Trust Department at a regional Pennsylvania bank.

Ms. Spencer is the author of "
Pennsylvania Estate Planning, Wills and Trusts Library: Forms and Practice Manual," (Data Trace, 2007), "Your Estate Matters," (AuthorHouse, 2005), and a weekly column entitled "Taxing Matters," published in the Lancaster Intelligencer Journal. She holds an LL.M. post-graduate law degree in Taxation from Boston University School of Law and is a member of both the Pennsylvania and Massachusetts Bars. Ms. Spencer can be reached at patti@spencerlawfirm.com or 717-394-1131. Learn more at www.spencerlawfirm.com.