Several clients have contacted our office recently regarding the Personal Representative’s Duty to File Petition to Determine the Elective Share.
Not doing so is commonly referred to as a breach of fiduciary duty whereby the Personal Representative breached his or her duty to file the Petition to Determine Elective Share after the surviving spouse or attorney-in-fact has filed notice of election to take elective share. The inquiries dealt with decedents who passed in 2017 and early 2018.
BACKGROUND OF FLORIDA ELECTIVE SHARE LAWS
Elective Share was created to replace dower. The Florida elective share law in place prior to 1999 limited the elective share to 30% of only probate assets. As with some laws, individuals found a loophole. As a result, strategic estate planning attorneys were circumventing the 30% elective share to surviving spouse and having their clients intentionally disinherit his or her spouse.
What estate planning techniques were used prior to 1999 that allowed the spouse to lose the 30% elective share?
Due to the elective share being limited to probate assets, the spouse was transferring all assets to non-probate assets such as homestead property in spouse’s name only, payable on death for bank and investment accounts, naming a beneficiary in a 401k or IRA other than spouse, and/or moving assets to a revocable trust.
In 1999, Florida’s elective share laws were revamped to rectify the elective share loophole that allowed a spouse to intentionally disinherit his or her spouse. Under the 1999 Florida elective share laws, other than homestead property, all probate and non-probate assets were included as part of the calculation of the 30% of elective share amount.
At this point, the 30% elective share calculation was understood to be the baseline or minimum amount. A spouse could receive more than the 30% of elective share if the Will bequeathed more, but not less. As a result, it was public policy for attorneys to have the spouse file the elective share to protect the spouse in case of any Will Contest; or, validity of Will or portion of its content knowing that the spouse would receive at least 30% for his or her elective share.
By 2015, a new case challenged and succeeded in determining the elective share amount as being strictly 30% if the spouse filed a petition to determine elective share, wiping out previous public policy that the 30% elective share was the bottom floor amount, not the ceiling amount.
In this case, the spouse received more under the Will than based on the 30% elective share amount. The surviving spouse appealed the lower court’s decision.
Upon appeal, the lower court’s decision was reaffirmed because the surviving spouse filed a Petition to Determine Elective Share and that is all the surviving spouse was to receive. In essence, the decision meant that the surviving spouse could not revert back to the amount she would have received in the Will, which was more than 30% of the elective share amount. The surviving spouse only received 30% of the elective share calculation amount and any assets above the elective share amount were returned to the estate.
Immediately following, In Richardson decision, CS/HB 267 was enacted to correct the elective share law to reflect the intention to protect the surviving spouse. Also, the Bill added the homestead as part of the elective share calculation.
DOES THE PERSONAL REPRESENTATIVE HAVE A DUTY TO FILE PETITION TO DETERMINE THE ELECTIVE SHARE?
There are several cases that support the requirement for the Personal Representative to file a Petition to Determine the Amount of the Elective Share.
For example, in a 1980 case, the surviving spouse filed her election to take her elective share; and, served the election of her elective share on all interested parties in accordance with Fla. R.P. & G. 5.360. A short time thereafter, she became hospitalized for an illness and then died in the hospital. The Personal Representative refused to file the Petition to Determine Elective Share and argued that the widow’s estate was not entitled to exercise her right to the elective share because she failed to file the Petition to Determine the Elective Share prior to her death.
The case was appealed. The appellant court determined, as in a previous 1972 case, that “when a competent widow chooses to elect dower she has done all she is required to do …” As a result, the Personal Representative has a duty to file the Petition to Determine the Elective Share because “if the surviving spouse files an election for elective share, the personal representative shall file a petition to determine the amount of the elective share …”
See Estate of Menz, 381 So.2d 375 (Fla. 1st DCA 1980), Estate of Hiley, 262 So.2d 476 (Fla. 4th DCA 1972), Harmon v. Williams, 596 So. 2d 1139 (Fla. 2d DCA 1992), and Tillman v. Smith, to name a few.
REVIEW DUTIES OF PERSONAL REPRESENTATIVE
An experienced Florida Probate Litigation Attorney may review the Personal Representative’s duty to administer estate prudently, administer estate in good faith, duty of loyalty, duty to inform and account, duty not to comingle, and liability to beneficiaries in order to set up his strategic plan for litigating the case. This approach covers one of the angles counsel may take to plead or defend a Will Contest or Elective Share litigation case.
If you have any concerns regarding the appointment of a Personal Representative of an estate or feel you may be more qualified as a Personal Representative over another individual, contact Florida Probate Litigation Attorney Thomas Upchurch or call to discuss your probate litigation matter at (386) 272-7445 or email firstname.lastname@example.org for your initial consultation.
Florida Estate Planning Attorney Thomas Upchurch serves the entire state of Florida, serving primarily in the vicinities of Central and North Florida which include Daytona Beach, Port Orange, Deland, Ormond Beach, Jacksonville, Palm Coast, Orlando, Saint Augustine, and New Smyrna Beach. Areas he serves in South Florida include Miami, Ft. Lauderdale, Coral Springs, and Coral Gables, and in West Florida include Tampa and Clearwater.
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