Effective October 1, 2013, the Elective Share rules for persons who die domiciled in North Carolina have been simplified and changed. Although the rules are now easier to understand, they may have a dramatic change on married couples property rights in North Carolina.
The “Elective Share” is the amount that a deceased person’s surviving spouse can elect to receive from the decedent’s estate if the decedent left them a lesser share (or nothing at all) in his or her Will. This Elective Share allows the spouse to disregard the deceased spouse’s Will to the extent allowed under the law.
Under the old law the surviving spouse’s share was based on the number of surviving children and a percentage was calculated. The new law is calculated only on the length of marriage with no adjustment based on the number of children. It is calculated as follows:
|Length of Marriage||Elective Share Amount|
|Less than five years||Fifteen percent (15%)|
|At least five but less than ten years||Twenty-five percent (25%)|
|At least ten but less than fifteen years||Thirty-three percent (33%)|
|Fifteen years or more||Fifty percent (50%)|
Individuals who either refer to the Elective Share Statute in their Wills or counted on this in their Estate Planning may wish to revise their plans to take into account the Elective Share rules under the new law. In applying this law the Elective Share calculation not only includes probate property passing to the surviving spouse, but also any other property that the decedent had an interest in during his or her lifetime. This would include IRAs, bank accounts, other retirement plans and life insurance.