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A surviving spouse of an intestate decedent (a person who died without a will) or a surviving spouse who elects against a will (testate situation) has a right of election under T.C.A. § 31-4-101. Specifically, this statute provides that depending on the length of the marriage, the surviving spouse can elect to receive a certain percentage of the net estate instead of receiving what is provided for in the will or in an intestate situation. T.C.A. § 31-4-101(a) provides as follows:
(a)(1) The surviving spouse of an intestate decedent who elects against taking an intestate share, or a surviving spouse who elects against a decedent's will, has a right of election, unless limited by subsection (c), to take an elective-share amount equal to the value of the decedent's net estate as defined in subsection (b), determined by the length of time the surviving spouse and the decedent were married to each other, in accordance with the following schedule:
If the decedent and the surviving spouse were married: The elective share % is:
Less than 3 years 10% of the net estate
3 years but less than 6 years 20% of the net estate
6 years but less than 9 years 30% of the net estate
9 years or more 40% of the net estate
The second part of the statute provides specific rules for how the "net estate" that is subject to an elective share election is calculated. T.C.A. § 31-4-101(b) provides as follows:
(b) The value of the net estate includes all of the decedent's real property, notwithstanding § 31-2-103, and personal property subject to disposition under the provisions of the decedent's will or the laws of intestate succession, reduced by the following: secured debts to the extent that secured creditors are entitled to realize on the applicable collateral, funeral and administration expenses, and award of exempt property, homestead allowance and year's support allowance. The net estate does not include any assets over which the decedent held a power of appointment, whether exercised or not, unless the decedent exercises the power of appointment to direct the assets to be paid to the decedent's personal representative for administration as part of the decedent's probate estate.
As a result, the net estate includes the decedent's real and personal property that are subject to disposition under a will or the laws of intestate succession reduced by the following:
1. Secured debts to the extent that secured creditors are entitled to realize on the applicable collateral.
2. Funeral and administration expenses.
3. Award of exempt property, homestead allowance, and years support allowance.
Subsection (c) of this statute provides that once the elective shares is calculated then the amount payable to the surviving spouse is reduced by the value of all assets included in the decedent's gross estate which were transferred or deemed transferred to the surviving spouse or for the benefit of the surviving spouse. However, specifically excluded from this provision are the homestead allowance, exempt property, and years support allowance (these amounts already reduced the value of the “net estate” discussed in section (b)). These amounts are not used to reduce the elective share received by the surviving spouse under Tennessee law. T.C.A. § 31-4-101(c) specifically provides as follows:
(c) After the elective-share amount has been determined in accordance with subsections (a) and (b), the amount payable to the surviving spouse by the estate shall be reduced by the value of all assets includable in the decedent's gross estate that were transferred, or deemed transferred, to the surviving spouse or that were for the benefit of the surviving spouse, but excluding the homestead allowance, exempt property and year's support allowance. For purposes of this subsection (c), the decedent's gross estate shall be determined by the court in the same manner as for inheritance tax purposes pursuant to title 67, chapter 8, part 3, except that the value of any life estate or trust for the lifetime benefit of the surviving spouse shall be actuarially determined.
It is very important to have Tennessee Probate attorney review the calculations necessary to determine what a surviving spouse may receive if they elect to receive an elective share under the statute. There are many considerations that need to be made in order to evaluate the best manner in which the surviving spouse should proceed to determine whether to demand an elective share.
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