Maine’s New Elective Share – Is a marriage more “worthy” with age? Maine’s new probate code thinks so. What do you think?
If a decedent leaves a will and the surviving spouse is not provided for, as in the case where the will postdates the marriage, or the spouse receives less than he or she thinks they are due, the spouse may elect to take against the will by filing a for an elective share. This is an election to take a statutory amount instead of what the will provides. Until the enactment of Maine’s Uniform Probate Code (MUPC) (Title 18-C of the Maine Revised Statutes), that amount was 1/3rd of the “augmented estate,” which was not always easy to calculate. The enactment of the MUPC changed that rough justice and exchanged it for, what I will refer to as, “uncertain equality,” and as you might gather from the rest of this post, I am not a fan of this change in the law.
Under the new law, the amount of the elective share is 50% of the “marital-portion of the augmented estate” (under the former Title 18-A M.R.S § 2-201, et seq. it was 1/3rd of the “augmented estate”). The augmented estate under Title 18-C, to the extent provided in Sections 2-204, 2-205, 2-206, and 2-207, consists of the sum of the values of all property, whether real or personal; movable or immovable, tangible or intangible, wherever situated, that constitute: (1) the decedent’s net probate estate; (2) the decedent’s nonprobate transfers to others; (3) the decedent’s nonprobate transfers to the surviving spouse; and (4) the surviving spouse’s property and nonprobate transfers to others. However, and this is where uncertain equality raises its ugly mug, the value of the marital property portion of the augmented estate consists of the sum of the values of the 4 components of the augmented estate (above) multiplied by a percentage that starts out at 3% and increases to 100% only with 15 years or more of marriage.
This change in law reflects the adoption of the MUPC of the partnership theory of marriage (an economic theory) by gradually increasing the amount of the elective share based on the length of the marriage but does not adopt a minimum elective share amount. That sounds all nice and well, but why then, inconsistently, does this same partnership theory not apply to the intestate share of a surviving spouse (that amount is not adjusted based on the length of a marriage) or the allowances and exemptions otherwise afforded to a spouse? Taking it one step further, the estate tax exemptions do not base marital deductions on this theory (nor the ability to port over an unused exemption amount of a deceased spouse). I find these inconsistencies troubling, though I do note that in the case of divorce, the length of a marriage may be a factor that is considered in the division of assets. However, at death, we are not dealing with a failed marriage, so is grafting on the family law concept of a partnership theory really a fair comparison in the context of an estate?
I have a number of thoughts with regard to the new law, and though I haven’t arrived at my final opinion, I am not a fan of the elective share change. The old elective share was sometimes rough, leaving the surviving spouse with the right to receive less than what the current law might provide, but the increased amount under the new law only comes for well-established marriages – does time make a marriage more “worthy.” Silver marriages (seniors getting married late in life) might well result in the surviving spouse receiving the shorter end of the financial stick. Why should the law discriminate in this manner? Is this disguised age-related discrimination? Who does this really favor? Who does this potentially hurt? Will this increase or decrease the complexity of advising clients that are recently married and interject ethical issues for the lawyer at a stage in the attorney-client relationship when there is no immediate conflict? If an individual considering a premarital agreement was on the fence about getting a premarital agreement and didn’t and gets married, are they more likely to seek an early divorce if they know that every year their spouse’s elective share interest in their estate is growing and will, after 15 years, reach 50%? Does this statute promote divorce? I think it conceivably might. It should, and probably will, encourage more premarital and post-marital agreements, but so few people are willing to come to the table with their spouse and lawyer and have these conversations, is this simply a trap for the unwary? And what about the Department of Health and Human Services (DHHS)? Many departments believe that they can enforce an elective share claim or treat it as a penalty if not made by a surviving spouse. Does this change in the law “damage” prior Medicaid plans that factored in the risk of a 1/3 claim but not a 50% claim? Does it change how attorneys should think about the viability of wills with supplemental needs-based plans? I think I will take that glass of wine now; my head is spinning!
While I am not a fan of the new elective share, I am not a fan of the old one either. Whenever the folks in office tinker with the clockwork, there are likely to be far-reaching implications. However, where the old law offered certainty, this law does not. Where the old law offered a minimal level of protection, this law does not. Whereas the old law was not inconsistent with the law in general as to decedents, in that it did not base its application on time (ie., the age of a marriage), this law does.