Florida Elective Share

Effective October 1, 1999, a surviving spouse is entitled to receive an "elective share" consisting of 30% of the "elective estate."  This new law applies to persons dying after October 1, 2001.  This "elective estate" consists of "probate" and many "non-probate" assets.  This varies from the previous law, whereby only probate assets were considered in the elective share.

The following are some of the assets the decedent's elective estate may consist of:

  • probate assets.

  • interests in securities or accounts registered in "Pay on Death," "Transfer on Death," "In Trust For," or in co-ownership form with a right of survivorship.

  • fractional interest in property held by "tenancy by the entirety."

  • assets held in a revocable living trust.

  • interests in annuities.

  • cash surrender value of life insurance.

  • IRA, 401k, pension, and other retirement accounts.

  • certain property gifted during the one-year period prior to decedent's death.

The New Elective Share has now made planning for a married couple even more complicated and requires the foresight to plan for the event of a well-spouse predeceasing a nursing-home spouse. 

It used to be that assets held in a revocable living trust by the decedent were not available under the elective share statute to the nursing-home, and by extension to the Medicaid Agency/Nursing Home.  That is no longer true. 

The practical effect of the old law was often that a well-spouse could perhaps leave assets to the couple's children or other beneficiaries without upsetting the nursing-home spouse's Medicaid benefits.

For example, Roger and Elizabeth are married with two children.  Elizabeth requires placement in a nursing home because of her advanced dementia and alzheimers.  Based upon Roger's and Elizabeth's income and asset levels, Elizabeth qualifies for ICP Medicaid benefits.  Roger is allowed to keep the Community Spouse Resource Allowance of $119, 220.00, as well as all of his income.

Roger establishes a revocable living trust, placing the CSRA into the name of the trust.  Roger is the trustee during his lifetime and names their children as co-trustees upon his death.  At the time of his death, all assets pass to their children directly.  Under old law, upon Roger's death, the elective estate would not include the assets held in the trust.  Therefore, Elizabeth could not assert her elective share right against the trust and force a distribution to her. 

Now, the living trust assets would be deemed to be part of the elective estate and Elizabeth could assert her elective share right against those assets of up to 30%.  The practical effect of this is that the Medicaid Agency may either attempt to assert her right on her behalf and therefore seek to acquire 30% of the trust assets to pay for her nursing home care, or deem that she failed to assert her right, and therefore made an improper transfer for which they would disqualify her from Medicaid benefits.

What To Do.

Because of these new laws, planning for an ill-spouse or a spouse with special needs requires careful planning.   In the above example, Roger may wish to establish an estate plan that combines the provisions of his Last Will and Testament with either a "Qualifying Special Needs Trust," or "Elective Share Trust."  Both of these trusts require specific and technical language and should be prepared by an attorney well versed in Public benefits law and Wills and Trusts.  Find an Attorney.

Qualifying Special Needs Trust

A "Qualifying Special Needs Trust" or "Supplemental Needs Trust" is a trust established for a disabled surviving spouse.  Some of the requirements of such a trust are:

  • The trust must be created before or after the decedent's death - with court approval.

  • The income and principal are distributable to or for the benefit of the spouse for life in the discretion of one or more trustees, less than half of whom are ineligible family trustees.  "Ineligible family trustees" include the decedent's grandparents and any descendants of the decedent's grandparents who are not also descendants of the surviving spouse.

  • During the spouse's life, no person other than the spouse has the power to distribute income or principal to anyone other than the spouse.

  • The requirement for court approval shall not apply if the aggregate value of all property in all qualifying special needs trusts for the spouse is less than $100,000.

          - Florida Statute Section 732.2025(8)

Elective Share Trust

An "Elective Share Trust" is a trust whereby:

  • The surviving spouse is entitled for life to the use of the property or to all of the income payable at least as often as annually.

  • The trust is subject to the provisions of s. 738.12 or the surviving spouse has the right under the terms of the trust or state law to require the trustee either to make the property productive or to convert it within a reasonable time.

  • During the spouse's lifetime, no person other than the spouse has the power to distribute income or principal to anyone other than the spouse.