Kelly Moore: Spousal Elective Share

In Utah, a surviving spouse has a right to a share of the deceased spouse’s estate unless the surviving spouse has specifically waived that right. Absent a waiver, one spouse or his or her children cannot stop the surviving spouse from receiving this share. If both spouses’ children are mutual to each other (meaning the deceased spouse has no children from a prior marriage or relationship) the surviving spouse receives the entire deceased spouse’s estate. If both spouses’ children are not mutual to each other (meaning they have a blended family and at least one of the deceased spouse’s children is not also the surviving spouse’s child) the surviving spouse receives a certain percentage of the deceased spouse’s estate.

This percentage is an augmented share based on a calculation involving a somewhat complex formula including a homestead, family allowance, and exempt property as factors. It is intended, depending on the size of the estate, that the surviving spouse will receive up to $75,000.00 and then a percentage of the remaining estate and the deceased person’s children will receive the other percentage. A probate will likely need to be filed to formally determine the decedent’s heirs and the amount of the elective share. As noted, the calculation for how much a surviving spouse will receive is somewhat complicated and depends on the size and type of property in the estate. Probate and Second There is a truism in the realm of probate and estate planning that where you fail to plan, the State will plan for you.

The law offers everyone the opportunity to dictate how their property and assets will be administered at their death. These options range from simple to complex, from a basic will to a detailed trust or family limited partnership. Regardless of what option you choose, the best advice is to do something rather than nothing, because doing nothing only ensures that you have no say in how your estate is administered and distributed. Doing nothing means your estate will be distributed as dictated by the legislature and the courts. For traditional families (i.e., husband, wife and children), a typical estate plan usually mirrors the distribution scheme provided for by the Utah Probate Code. Specifically, the estate passes to the surviving spouse, and then to the children. Many families do not fit the traditional mold, even if they start out that way. Much probate litigation occurs in the context of non-traditional, blended families and stepchildren. We all hope that our families will be able to handle our passing, get along, and work together, but experience shows that the lack of an estate plan often results in people looking out for their own interests rather than honoring the deceased’s wishes.

Two commonly misunderstood issues in probate litigation involve either the “spousal elective share” or the “spousal intestate share.” The spousal elective share allows a surviving spouse to receive a specified amount from the estate even though he or she was omitted from the will or was intentionally disinherited. The exact amount is the subject of a complex calculation, but, generally, it is one third of the augmented estate with a minimum of $75,000. Similarly, the spousal intestate share provides that where you are survived by your spouse as well as children who are not descendants of your spouse (e.g., your spouse’s stepchildren, including your own children from a prior marriage) the surviving spouse is entitled to the first $75,000 from the estate as well as one half of the remaining property of the estate. Disputes often arise in connection with estates that are valued at less than a hundred thousand dollars, which may leave much less for your children than you intended, or might result in more going to someone you might have intended get little or nothing.

In addition to these special spousal provisions, the law also dictates to whom property will pass in the event you die without a will. Generally, property passes in the following order:

• spouse;

• descendants;

• parents;

• siblings;

• grandparents;

• aunts/uncles;

• Cousins.

A Utah decedent has the ability to dispose of all property that is titled in his or her name at the time of death. Utah is not a community property state. Utah does draw a distinction between marital property and separate property, but the distinction is relevant only for divorce. The distinction is not relevant for determining what property the decedent may dispose of at death. The one exception to this rule is that the distinction between marital and separate property is used in calculating the surviving spouse’s elective share. Real estate held by a married couple “as husband and wife” is deemed to be held in joint tenancy with right of survivorship.

Real estate held by a married couple without such a designation is deemed to be held as tenants in common. If the decedent is survived by a spouse, and if all of the decedent’s descendants are also the surviving spouse’s descendants, the surviving spouse is entitled to all of the property that passes under the rules of intestacy. If the decedent is survived by a spouse, and if the decedent is survived by one or more descendants who are not the surviving spouse’s descendants, the surviving spouse is entitled to $75,000 plus one-half of the balance of the intestate property. Adjustments are made for non-probate transfers to the surviving spouse. Property not passing to a surviving spouse is distributed to the decedent’s descendants per capita at each generation. If the decedent is not survived by either a surviving spouse or any descendants, the intestate property passes to the decedent’s parents. If neither of the decedent’s parents survives the decedent, the intestate property passes to the descendants of the decedent’s parents per capita at each generation.

If the decedent is not survived by any parents or descendants of parents, one-half of the intestate property passes to the decedent’s maternal grandparents or to their descendants per capita at each generation, and one-half passes to the decedent’s paternal grandparents or to their descendants per capita at each generation. If the decedent is survived by none of the foregoing persons, the property passes to descendants of the decedent’s predeceased spouse. Adjustments are made for non-probate transfers to such heirs.

Distribution Methods in Utah / Per Capital at Each Generation

The default method of distribution in Utah is the per capita at each generation method. This method applies where the decedent dies intestate. It also applies where the will or trust directs distribution to a person’s issue or descendants but is silent as to the method of distribution to be applied. Of course, where the will or trust specifies a different method of distribution, the will or trust governs. Under the per capita at each generation method of distribution, each living child receives one share, and one share is assigned to each deceased child who left surviving descendants. The shares assigned to deceased children are all aggregated and divided equally among their children.

Utah has a Streamlined Probate System

Utah has adopted the Uniform Probate Code. The probate process is thus relatively simple and requires minimal court involvement. Unless a party petitions the court for judicial resolution of a matter, an estate can be probated without any hearings before a judge. Everything can be handled through the clerk at the filing window. The personal representative has the authority to distribute property and sign deeds.

Small Estate Affidavit Procedure

No probate is needed in Utah if the total amount of the decedent’s property that would otherwise be subject to probate is less than $100,000 and if none of the property is real property. An affidavit will suffice to give banks and brokerage firms holding the property the authority to distribute it to the persons entitled to it.

Revocable Trusts are Valid

Revocable trusts are valid and commonly used in Utah. No particular vesting language need be included in the trust in order for it to be valid.

Execution Requirements for Wills

A will must be witnessed by two persons, each of whom must see the testator sign the will, acknowledge her signature or acknowledge the will, and each of whom must sign the will as a witness within a reasonable period of time thereafter. Utah has enacted a substantial compliance statute that focuses on the intent of the testator.

Surviving Spouse’s Elective Share

A decedent’s surviving spouse may choose to take her statutory elective share in lieu of what she receives under the decedent’s estate plan. In very general terms, the elective share is one-third of the augmented estate. The augmented estate consists of all marital property (i.e. property earned during marriage, including income and appreciation thereon) owned by either the husband or the wife.

Other Family Protection Statutes

Utah provides a $15,000 homestead allowance to the decedent’s surviving spouse or, if there is no surviving spouse, to the decedent’s minor children. In addition, the surviving spouse or, if there is no surviving spouse, the decedent’s minor children, are entitled to $10,000 in furniture, furnishings and personal effects. In addition, the court may grant a reasonable living allowance to the family for living expenses during the period of administration, not to exceed one year.

Enforceability of No Contests Clauses

No contest clauses in wills and revocable trusts are enforceable in Utah only if there is no probable cause for the contest.

Utah Asset Protection Trusts

Utah permits self-settled asset protection trusts. The trust must be irrevocable and the words “asset protection trust” must appear in the title. The trust must have a corporate trustee, and at least some of the trust assets must be held in the form of cash or stocks in an account with the trustee. The trust must not provide for mandatory distributions.

Utah Rule Against Perpetuities

Utah has enacted a version of the Uniform Statutory Rule against Perpetuities Act. Utah has enacted anti-lapse statutes that apply to wills, revocable trusts and beneficiary designation arrangements. The statutes apply where the predeceased beneficiary is a grandparent of the decedent, a descendant of a grandparent of the decedent or a step-child of the decedent. A decedent’s heirs under the Utah wrongful death statute are different from the heirs under Utah’s rules governing intestate succession. The heirs for purposes of the wrongful death statute are the decedent’s spouse, children and parents and, in some circumstances, the decedent’s step-children. If the decedent is survived by neither spouse, children nor parents, the decedent’s intestate heirs will also qualify as heirs for purposes of the wrongful death statute.

The Will of an Estate

The estate owner may use a will to provide for heirs when he or she passes. In the provisions, this person may state which party receives how much from the estate. In some wills, the estate owner may disinherit the spouse. However, the elective share process may bypass this and still provide for the spouse. In many situations where this is possible, the courts will not protect any asset, and some businesses may even break up and sell in parts to pay for the up to one-third share. This process could invalidate the will’s provisions for the spouse and change how much children inherit.

You Need A Will

While the estate owner may die without his or her wishes followed due to the elective share, the rest of the will may provide for other heirs. Additionally, the spouse may already know he or she will not receive the same amount as what the state’s elective share would give. If the spouse is willing to waive the elective share, the provisions in the will may stand in completion. This could protect businesses, provide for children or grandchildren and give to charities or other dependents. The surviving spouse may receive monetary assets in another manner that are in excess of the elective share. If the estate owner died without making a will, the estate will go through a default probate court process. The heirs of the estate may still receive an amount provided by the state for the assets that remain. However, the probate courts may use businesses left as a means of sale and profit. Instead of passing a company to another person, it may undergo a sale and the proceeds given to the heirs and spouse. To prevent this and other actions, the estate owner needs to create a legal document that specifies what happens to the assets.

The elective share rule is the default setting for a spouse that faces an estate with no will or other provisions in place. In the usual situation, the spouse and direct children have an opportunity to receive an amount of the estate in percentage based on who the party is. If the spouse does not want to take advantage of the elective share, he or she does not need to do so and may choose to waive this right. This is entirely up to him or her. While the minimum of this process may alter the business or assets transferred to the children or other dependents, the spouse may waive any elective share rights to keep the estate intact and not interrupt the inheritance of others.

Probate Lawyer in Utah Free Consultation

When you need legal help with a spousal elective share in Utah, please call Ascent Law LLC for your free estate law consultation (801) 676-5506. We want to help you.