If you’re a working probate attorney, elective share claims loom large in your practice. Which means anytime the thicket of interconnected and complicated statutes making up this body of law gets changed, it’s worth paying attention to. And recently there’s been an uptick in activity on the legislative front.

In 2016 our legislature amended F.S. 732.201 to make explicit what most of us had assumed was always the case: elective share claims set a floor — not a ceiling — on the amount of assets a surviving spouse is entitled to from an estate (see here).

This year a much broader package of reforms was introduced via Senate Bill 724. For those of us in the trenches, a good first start in terms of making sense of how these changes will actually impact our day-to-day practice is the bill’s Legislative Staff Analysis, which I’ve summarized below. All of these changes took effect on July 1, 2017.

[1] Homestead is Now Included in the Elective Estate:

This is a big deal. Previously, homestead property was specifically excluded from the elective estate. Now, homestead property is expressly included in the elective estate (F.S. 732.2035(2)), unless the surviving spouse has waived his or her homestead rights (F.S. 732.2045(1)(i)). If the homestead passes to the surviving spouse in fee simple, it’s valued at its fair market value on the date of the decedent’s death, but if the surviving spouse takes a life estate or an undivided one-half interest in the homestead, it’s valued at one-half of its fair market value on the decedent’s death date (see F.S. 732.2055(1) and 732.2095(2)).

[2] Extension of Time to File:

This change will make life easier for claimants. In order to exercise the option to take the elective share, a surviving spouse must file his or her election by the earlier of 6 months after the date the surviving spouse is served with the estate’s Letters of Administration, or 2 years after the death of the surviving spouse (F.S. 732.2135(1)). Previously, if you wanted to ask for an extension to file your claim, you had to do that before your original filing deadline. That’s changed. Now you can file for an extension up to 40 days after your original filing deadline (F.S. 732.2135(2)).

[3] Elective Share Trusts and the “Unproductive Property” Trap:

If done properly, an “elective share trust” allows a person to satisfy his or her surviving spouse’s elective share rights, while still retaining the right to say what happens to the elective-share assets when the surviving spouse dies. This planning device can be especially useful where a person wants to provide for a second wife or husband, but make sure the family assets go back to his or her children from a prior marriage when the surviving spouse dies. Given the natural tensions inherent to all blended families, it’s not uncommon for these trusts to end up getting litigated.

Drafting an enforceable elective share trust can be technically challenging. For example, in order to qualify as an elective share trust, the trust agreement must provide the surviving spouse with the ability to convert unproductive trust assets into productive assets (e.g., compel the trustee to sell a vacant lot that’s producing no income). Previously, if you left that clause out you could end up in court (see here). Not any more. Revised F.S. 738.606 will now “save” your trust by adding that clause statutorily if it got left out in the drafting process. This is a welcomed change.

[4] Attorney’s Fees and Costs:

It kills me when unscrupulous litigants use the threat of catastrophic legal fees to brow beat adversaries into accepting legally baseless claims. Little by little this threat is getting chipped away in the trusts and estates context by giving our court’s expanded cost-shifting powers (see F.S. 733.106(4) and F.S. 736.1005(2)). And now those expanded powers have come to elective share litigation.

Previously, if a court concluded an election was made or pursued in bad faith, the court could assess attorney’s fees and costs against the surviving spouse or the surviving spouse’s estate. Bad faith is a high standard to meet — so it’s gone! Under new F.S. 732.2151, a probate judge’s cost-shifting authority’s been significantly expanded to the much more generous “as chancery requires” standard. “The well settled rule in chancery cases is that a court of equity may, as justice requires, order that costs follow the result of the suit, apportion the costs between the parties, or require all costs be paid by the prevailing party.” Estate of Brock, 695 So.2d 714, 716 (Fla. 1st DCA 1996).

The new statute also addresses the mechanics of fee shifting in the probate context, authorizing a court to do one or more of the following:

  • Direct payment from the estate;
  • Direct payment from a party’s interest in the elective share or the elective estate; or
  • Enter a judgment that can be satisfied from other property of a party.

And last but not least, if the personal representative fails to file a petition to determine the amount of the elective share, as required by the Probate Rules, the surviving spouse can get paid from the estate for doing that job.

[5] Contribution to the Elective Share:

Ideally, you want to make sure no one gets anything until you’ve calculated how much the elective share is going to be. Bringing assets back into the estate is never easy, but sometimes it’s unavoidable. Beneficiaries who have received a distribution of property that is included in the elective estate, as well as “direct recipients” (F.S. 732.2025(1)), must give those assets back (i.e., “contribute”) to the extent necessary to satisfy an elective share shortfall (F.S. 732.2085(1)).

Those who owe a contribution must, as a general matter, pay interest on the contribution at the statutory interest rate. This interest starts accruing 90 days after the contribution order under current law. But what if there’s no contribution order? The statute’s been amended so that interest begins accruing on any amount of the elective share not satisfied within 2 years of the date of the decedent’s death, regardless of whether an order of contribution was entered (F.S. 732.2145(1)).

But wait, there’s more!

Elective share claims can be among the most technically challenging matters any probate lawyer ever has to contend with. So anytime that body of law changes, you’ll want to draw on as much professional commentary as possible to figure out all the implications. Which brings me to an excellent Florida Bar Journal article I’d recommend entitled Recent Amendments Bring Important Changes to Florida’s Elective Share, by Lauren Y. Detzel and Brian M. Malec. Here’s an excerpt:

The amendments made to Florida’s elective share laws during the 2016 and 2017 legislative sessions should be welcome news to surviving spouses. The protections enacted, including the opportunity for surviving spouses to obtain attorneys’ fees and costs in litigation and their entitlement to interest on delayed elective share payments, further Florida’s public policy and remove the inequities that disadvantaged surviving spouses in elective share litigation under prior law. Given the importance of the elective share, however, do not be surprised if additional legislative proposals are made to continue refining perceived injustices in the current regime.