Author: Brenton McWilliams
What is the spousal elective share in Alabama?
The spousal elective share is the right of a surviving spouse to claim a certain portion of their spouse’s estate on the death of the spouse. In other words, when one member of a married couple dies, the widowed spouse has the right to claim a certain portion of the deceased spouse’s estate. The intent is to preserve a minimum portion of the estate for the support of the widowed spouse. In Alabama, the spousal elective share is a statutory right codified as part of the Alabama Probate Code, Ala. Code § 43-8-70:
Right of surviving spouse to elective share.
(a) If a married person domiciled in this state dies, the surviving spouse has a right of election to take an elective share of the estate. The elective share shall be the lesser of:
(1) All of the estate of the deceased reduced by the value of the surviving spouse’s separate estate; or
(2) One-third of the estate of the deceased.
(b) The “separate estate” of the surviving spouse shall include:
(1) All property which immediately after the death of the decedent is owned by the spouse outright or in fee simple absolute;
(2) All legal and equitable interests in property the possession or enjoyment of which are acquired only by surviving the decedent; and
(3) All income and other beneficial interests:
a. Under a trust;
b. In proceeds of insurance on the life of the decedent; and
c. Under any broad-based nondiscriminatory pension, profit-sharing, stock bonus, deferred compensation, disability, death benefit or other such plan established by an employer.
(c) If a married person not domiciled in this state dies, the right, if any, of the surviving spouse to take an elective share in property in this state is governed by the law of the decedent’s domicile at death.
The surviving spouse is given a right of election, meaning the surviving spouse is given a choice as to whether or not they would like to claim the elective share. The spousal elective share is not an absolute entitlement. The spouse can elect not to claim it.
Alabama law on the spousal elective share only applies if the deceased person was domiciled in Alabama at the time of their death.
As a practical matter, spousal elective share issues usually only come up when someone leaves a will that leaves either nothing to the surviving spouse or leaves some portion of the estate to the surviving spouse that is of less value than the spousal elective share. For probate estates without a will, also referred to as intestate estates, the statutory share of the estate given to the spouse under Alabama intestate succession laws will almost always exceed the value of the spousal elective share. Therefore, the spousal elective share is not a common issue among Alabama intestate estates.
What Portion of the Estate is the Surviving Spouse Entitled to Under Alabama’s Spousal Elective Share?
When the spousal elective share is claimed in Alabama, the spouse is entitled to the smaller of 1/3rd of the estate or the value of the entire estate reduced by the spouse’s “separate estate.” Determining the actual value of the spousal elective share requires a calculation and comparison of both figures. Once the value of the estate is known, calculating 1/3rd of the estate is relatively simple. Determining the value of the estate less the spouse’s “separate estate” is more complicated and requires a review of nonprobate assets inherited by the spouse such as benefits from a life insurance policy, property passing under a right of survivorship, accounts where the spouse is designated as a pay on death beneficiary, and distributions to the spouse under a trust.
How to Avoid Alabama’s Spousal Elective Share?
For marriages involving financially independent partners with children from a prior marriage, the spousal elective share has the potential to disrupt well laid estate plans.
Possibly the simplest way to avoid creating the right to a spousal elective share in Alabama is to not get married. The spousal elective share only arises between married couples. Up until 2017, Alabama was one of the last states to recognize common law marriage. Subject to a few exceptions such as previously existing common law marriages and common law marriages created in other states, from 2017 forward, a couple must be legally married for the surviving spouse to have a right to the spousal elective share.
The right to a spousal elective share may also be waived by a signed writing. This is typically done with a prenuptial or post-nuptial agreement. The typical prenuptial agreement is much simpler than what is shown on television and movies. Especially for later in life marriages where each spouse is financially independent, the goal of the prenuptial agreement is usually to allow each individual to keep their property separate. By keeping their property separate, each spouse retains the individual freedom to leave their estate to whomever they choose.
Additionally, at least in Alabama, a properly funded revocable living trust is another way to avoid the spousal elective share. In some states other than Alabama, the spousal elective share is a portion of the decedent’s “augmented estate” which includes the value of certain assets transferred by the decedent during the decedent’s lifetime. The augmented estate concept is part of the Uniform Probate Code. However, when Alabama adopted its Probate Code, Alabama rejected the Uniform Probate Code’s augmented estate concept. The claim for the spousal elective share can only be made against the assets which are part of the probate estate. Because a properly funded revocable living trust will avoid inclusion in the probate estate, assets within the revocable living trust are not subject to the claim for a spousal elective share.
If you have questions about estate planning in Alabama, preparing a revocable living trust or estate plan, please call me at (251) 215-9275 or write me on the contact page to discuss how I can help.