Under Tennessee statutory law, a surviving spouse may take an “elective share” of the deceased spouse’s estate in lieu of what has been provided for him or her in the will or through the laws of intestacy. This law provides a mechanism for protecting the rights of surviving spouses who may not have received what they consider a fair share of the decedent’s estate. For individuals concerned about having their wishes altered by such an election, several estate planning tools remain available to minimize the risks associated with the elective share.
Generally, a surviving spouse has nine months following their spouse’s death to make an election. To calculate the elective share, T.C.A. § 31-4-101 provides a sliding scale on the percentage of the net estate that the surviving spouse is entitled to, based on the length of the marriage. Depending on the length of the marriage, the percentage of the net estate a surviving spouse may receive ranges from 10% to 40%. Once the elective share is determined, that amount is reduced by the value of any other assets transferred for the benefit of the surviving spouse. The elective share is exempt from the claims of unsecured creditors and certain tax allocations.
For individuals who would like to avoid the possibility of an elective share being taken by a surviving spouse, there are several estate planning measures that can be taken to ensure your assets are distributed according to your wishes. When considering potential asset protection tools, consider the effect of non-probate transfers upon the overall value of the net estate. By ensuring: 1) a proper titling of assets; 2) accurate beneficiary designations of any life insurance policies, retirement accounts, or any assets that are payable-on-death; and 3) the potential creation of any trusts or additional non-probate transfers; it may be possible to reduce the value of the net estate to make the elective share a less appealing alternative.