Article on Community Property or The Elective Share

Terry L. Turnipseed (Associate Professor of Law and Associate Professor of Engineering and Computer Sciences (by courtesy appointment), Syracuse University) recently published an article entitled, Community Property v. The Elective Share, 72 La. L. Rev. 161 (2011). The introduction from the article is below:

There is certainly no doubt that community property has its faults. But, as with any flawed thing, one must look at it in comparison with the alternatives: separate property and its companion, the elective share. This Article argues that the elective share is so flawed that it should be jettisoned in favor of community property.

The elective share can trace its ancestry to dower and curtesy, with the concept of dower dating to ancient times. In old England, a widowed woman was given a life estate in one-third of certain of her husband’s real property-property in which the husband held an inheritable or devisable interest during the marriage. Once dower attached to a parcel of land at the inception of the marriage, the husband could not unilaterally terminate it by transferring the land. The right would spring to life upon the husband’s death unless the wife had also consented to the transfer by signing the deed, even if title were held in only the husband’s name.

Curtesy provided a surviving husband with a life estate in all the wife’s qualifying real property, but only if children were born to the couple. The type of real property that was subject to curtesy was the same as with dower, as were the rules that related to when the right attached and when it could be terminated.

Virtually all United States jurisdictions have abolished dower and curtesy in favor of the elective share. Georgia is the only state which does not have a statutory elective share or community property concepts. In modern America, then, 49 of the 50 states and the District of Columbia limit freedom of testation vis-a-vis surviving spouses.

More than in any other area of wills and trusts, state laws differ over the exact details of their respective elective share doctrines. For example, state law varies widely in the amount to which the surviving spouse is entitled, the variables that determine the amount (length of marriage, family situation, surviving spouse’s net worth, etc.), and the property that is subject to the elective share. Typically, the surviving spouse is allowed to elect one-third of the decedent-spouse’s property if the decedent had surviving issue or one-half if there are no surviving issue.

In some states, a testator can easily avoid subjecting her assets to the elective share upon death simply by placing assets into one or more types of trusts.13 Other more sophisticated elective share statutes bring back most inter vivos transfers into the pool of assets from which the elective share is taken, including those inter vivos transfers made to trusts.

All elective share statutes, however, can be defeated by transferring assets to an offshore asset protection trust. Once the transferor-decedent has died, it is, in reality, impossible for a United States court to force the transfer of such assets back into the hands of the surviving spouse.

While there may or may not have been valid grounds for separate property systems with elective share concepts when they were originally adopted by most U.S. states, we are long overdue for a total review of separate property and whether a systematic switch to community property should be undertaken. The primary purpose of this Article is to stimulate such discussions, with the hopeful result that state legislatures will at least address the issue of switching to community property. Separate share systems can easily be defeated by the wealthy who can afford expensive counsel fees to configure assets in needless, wasteful and complex arrangements specifically designed to defeat the elective share. As discussed in more detail below, there is increasingly a distinction between those who can afford testamentary freedom in separate property jurisdictions (through the high fees of competent advisors) and those who cannot. This distinction is shameful and should be eliminated.

Absent converting to community property concepts, there is no way to produce an effective elective share law.