To determine the surviving spouse’s elective share, the first step is to determine the value of the “elective estate”.  Unless stated otherwise, the valuation of each of the following categories is the fair market value on the date of the decedent’s death. The following nine categories of property are included in the elective estate:

  1. The decedent’s probate estate. §732.2035(1), F.S. The probate estate includes all of the decedent’s property wherever located that is subject to estate administration in any state of the United States or in the District of Columbia. See §732.2025(7), F.S. Exceptions: The probate estate does not include claims against the estate (including funeral expenses), mortgages, liens, and security interests. See §732.2055(4), F.S.
  1. Joint bank accounts and similar arrangements. §732.2035(2), F.S. This category includes the decedent’s ownership interest in bank/brokerage accounts and securities registered in “Pay On Death,” “Transfer On Death,” “In Trust For,” or co-ownership with right of survivorship form. The term “decedent’s ownership interest” means, in the case of accounts or securities held in tenancy by the entirety, one-half of the value of the account or security, and in all other cases, that portion of the accounts or securities which the decedent had, immediately before death, the right to withdraw or use without the duty to account to any person.
  1. Joint tenancies and tenancy by entireties. §732.2035(3), F.S. This category includes the decedent’s fractional interest in real and personal property (exclusive of categories 2 and 7) held by the decedent in joint tenancy with right of survivorship or in tenancy by the entirety. The term “fractional interest” means the value of the property divided by the number of tenants; it is immaterial whether the decedent contributed some, all or none of the consideration for the property. See §732.2035(3), F.S.
  1. Revocable trusts. §732.2035(4), F.S. This category includes property (exclusive of category 2) transferred by the decedent to the extent that at the time of the decedent’s death, the transfer was revocable by the decedent alone or in conjunction with any other person. This category includes revocable trusts as defined in §732.2025(9), F.S. Exception: This subsection does not apply to a transfer that is revocable by the decedent only with the consent of all persons having a beneficial interest in the property.
  1. Irrevocable transfers by and for the decedent. §732.2035(5), F.S. This category includes that portion of property (exclusive of categories 3, 4 and 7) transferred by the decedent to the extent that at the time of the decedent’s death:
  1. a) The decedent possessed the right to, or in fact enjoyed the possession or use of, the income or principal of the property. Typical examples include a transfer to: (i) a personal residence trust, or (ii) a pooled income fund, or (iii) a trust where the decedent retained an annuity or unitrust interest. The amount included is the value of the portion of the property to which the decedent’s right or enjoyment related, to the extent the portion passed to or for the benefit of any person other than the decedent’s probate estate;[1] or
  1. b) The principal of the property could, in the discretion of any person other than the spouse of the decedent, be distributed or appointed to or for the benefit of the decedent. It is the possibility that the decedent might receive the principal, rather than the right or actuality, that causes inclusion. The amount included is the value of the portion subject to the discretion, to the extent the portion passed to or for the benefit of any person other than the decedent’s probate estate. [2]

Exceptions: This category does not apply to any property if the decedent’s only interests in the property are that: (i) the property could be distributed to or for the benefit of the decedent only with the consent of all persons having a beneficial interest in the property; or (ii) the income or principal of the property could be distributed to or for the benefit of the decedent only through the exercise or in default of an exercise of a general power of appointment held by any person other than the decedent; or (iii) the income or principal of the property is or could be distributed in satisfaction of the decedent’s obligation of support; or (iv) the decedent had a contingent right to receive principal, other than at the discretion of any person, which contingency was beyond the control of the decedent and which had not in fact occurred at the decedent’s death.

  1. Life insurance. §732.2035(6), F.S. This category includes the decedent’s beneficial interest in the net cash surrender value immediately before death of any policy of insurance on the decedent’s life. See §§732.2035(6) and 732.2055(1), F.S.
  1. Retirement plans. §732.2035(7), F.S. This category includes amounts payable to or for the benefit of any person by reason of surviving the decedent under any public or private pension, retirement, or deferred compensation plan, or any similar arrangement. Exceptions: This category does not apply to: (i) benefits payable under the federal Railroad Retirement Act or the federal Social Security System; and (ii) in the case of a defined contribution plan as defined in s. 414(i) of the Internal Revenue Code of 1986, as amended, the excess of the proceeds of any insurance policy on the decedent’s life over the net cash surrender value of the policy immediately before the decedent’s death.
  1. Near death transfers. §732.2035(8), F.S. This category includes the following two distinct categories relating to transfers by the decedent within the one year period immediately preceding death:
  1. a) The first category includes the value of any property transferred as a result of the termination of a right or interest in, or power over property that would have been included in the elective estate under categories 4 or 5 if the right, interest, or power had not terminated until the decedent’s death;[3] and
  1. b) The second category includes any transfer of property to the extent not otherwise included in the elective estate, made to or for the benefit of any person. Exceptions: (i) any transfer of property for medical or educational expenses to the extent it qualifies for exclusion from the United States gift tax under s. 2503(e) of the Internal Revenue Code, as amended; and (ii) after the application of exception (i), the first annual exclusion amount [i.e., the amount of one annual exclusion under s. 2503(b) or (c) of the Internal Revenue Code] of property transferred to or for the benefit of each donee during the 1-year period, but only to the extent the transfer qualifies for exclusion from the United States gift tax under s. 2503(b) or (c) of the Internal Revenue Code, as amended.[4] Valuation: Fair market value (net of liens, mortgages, etc.) as of the date of the transfer rather than the date of the decedent’s death. See732.2055(4), F.S. Comments: This category only pertains to “transfers”; terminations of otherwise includible interests or powers won’t qualify. However, a discretionary distribution from a trust is treated as a transfer by the decedent and not as a termination of any interest or power in the trust. See §732.2095(1)(a)1., F.S.
  1. Elective Share Trust. §732.2035(9), F.S. This category includes transfers to an elective share trust as defined in §732.2025(2), F.S. See §732.2025(10), F.S.

[1] Example – Retained Income for Life. D creates an irrevocable trust, providing for the income to be paid annually to D for life, then for the corpus of the trust to go to X. Subsequently D dies, survived by S and X. Since D retained the right to all of the income, the entire value of the trust is in the elective estate. Had D retained only half of the income, only half of the trust would be included in the elective estate.

Example – Retained Annuity. D creates an irrevocable trust providing for a fixed dollar amount to be paid annually to D for life, after which time the remaining corpus is to go to X. The amount of the annuity payment exceeds the annual income earned on the trust property. D dies six years after the trust is created, survived by S and X. D’s retained annuity is treated as a retained right to income. Accordingly, the entire value of the trust (determined as of D’s death) is included in the elective estate.

[2] Example – Discretionary Trust. D creates an irrevocable trust giving trustee, T, the discretion to distribute income or principal to a group consisting of D and other named members of D’s family, with any income not distributed to be added to principal. At the death of the last of D and his children, the trust principal is to be distributed to D’s descendants. D dies, survived by S and several children and grandchildren. The entire value of the trust is included in D’s elective estate. Had D named S as trustee, nothing would be included.

[3] Example – Near Death Assignment. D creates an irrevocable trust, providing for the income to be paid annually to D for life, then for the corpus of the trust to go to X. Two months before his death, D assigns his income interest in the trust to X. D dies, survived by S and X. Had D not assigned his income interest, the value of the property in this trust would have been included in the elective estate under the rule relating to transfers with a retained right to income.

[4] Example – Distribution from Revocable Trust. In January, D creates a revocable inter-vivos trust In June, D directs the trustee of the trust to pay child, C’s $12,000 college tuition bill. In December and again in January of the following year, D directs the trustee to distribute $10,000 to C. D dies two months after the final distribution, survived by C and S. Although distributions from a revocable trust are treated as transfers, of the $32,000 distributed in the year preceding D’s death, only $10,000 is included in the elective estate. The distribution for college tuition and one of the $10,000 distributions to C are excluded.