Under long-standing Maryland law, the one person you cannot disinherit is your spouse. Irrespective of what you say in your will, your spouse has the absolute right to "elect" against the will and take his or her statutory share of the estate. This share has been statutorily defined as one-third share of the "net estate" if there is also a surviving child, or a one-half share if not. The problem has been that while the law may have been well-intended, it often failed to accomplish its goal as a person could easily limit the size of his or her net estate.
The problem with using the "net estate" as the assets from which the statutory share is determined is that only probate assets are included in the estate. These are assets that are in your name alone and are distributed in accordance with your will or by law if you die without a will. Assets that pass to others by operation of law, such as payable or transfer on death accounts and jointly held accounts and property, are non-probate assets and are not part of your estate. Non-probate assets could also include trusts that you create and gifts that you gave during your lifetime.
A new law effective October 1, 2020, strengthens the law by expanding what is included in the "net estate." Now, there is an "Augmented Estate" that includes both probate and non-probate assets. This will make the net estate substantially larger thereby increasing the elective share for the surviving spouse. This law makes it substantially more difficult to limit the amount your spouse can get from your estate after you die.
For many people, this change will mean very little. If you are leaving everything to your spouse in your will, than this change will not impact you at all. But, if you are part of a blended family, for example, and you and your spouse each intended to leave all or most of your estates to children from a prior relationship, than this law will have consequences to your estate plan. While your spouse may honor you wishes (you do not have to elect against your spouse's will), he or she may not. Such an election would mean that up to one-half of your net estate may not be distributed as you intended.
There are ways to avoid this problem. A spouse can consent in writing to a transfer of assets prior to a decedent's death or you and your spouse could enter into a prenuptial or postnuptial agreement that includes a waiver of the right to elect against the other's will. Another option may be to leave your spouse one-third or one-half of your estate, so his or her election against your will would have no real consequences.
While there are certainly people who have acted to harm their spouse, and this new law tries to address that, most decisions to exclude a spouse or limit his or her share probably stem from the desire to protect children from a prior marriage or relationship. And in most instances, the spouses are likely in agreement as to the disposition of their estates. But as is often the case, what was once simple has now become more complicated.
If you want to revisit your estate plan, draft a new will, or consider a prenuptial or postnuptial agreement, contact our attorneys discuss your needs.