New North Carolina Law Radically Changes Minimum Inheritance Rights of Surviving Spouses

Most married couples want to leave the majority, if not all, of their assets, either outright or through a trust, to their spouse.  But situations often come up, particularly in second marriage situations, where a client wants to leave most or all of their assets to children from a prior marriage or other individuals rather than their current spouse.  North Carolina is one of many states where you cannot disinherit your spouse (absent a premarital agreement — more on that in a minute).  In fact, most states provide a cause of action for a surviving spouse if the other spouse does not leave them at least a certain portion of their assets upon the spouse’s death.

The statutory concept — allowing a surviving spouse to claim a part of the predeceasing spouse’s estate — is called the “elective share”.  In other words, if the surviving spouse is not happy, and has not been left the minimum amount required by the statute, then he or she may file an elective share claim to claim what the statute mandates the decedent leave the surviving spouse.

North Carolina radically changed its laws on this issue as of January 1, 2014.  Prior to the new law, the elective share was based on whether the marriage was the decedent’s first or subsequent marriage, and whether the decedent had children from the current or prior marriage.  Presumably based on policy decisions, the surviving spouse received a larger share if the decedent had no children or it was a first marriage, and a smaller share if the decedent had children or it was a subsequent marriage.

The new law, effective January 1, 2014, bases the surviving spouse’s elective share of the decedent’s estate solely on the duration of the marriage (regardless of whether it was a first marriage or whether there were any children from the current or a prior marriage).  In general, if the couple had been married less than 5 years the surviving spouse is entitled to 15% of the estate.  Between 5 and 10 years the portion increases to 25%.  Between 10 and 15 years the portion increases to 33%.  And, after 15 years the portion increases to and stays at 50%.  The computation of the actual amount to which the surviving spouse would be entitled is somewhat involved and beyond the scope of this article.  As with the old law, the statutory provision merely gives the surviving spouse a legal right that he or she must affirmatively claim.  If the spouse does not act in a timely manner, then the legal right disappears.

One thing to keep in mind is that the statutory provisions can be waived or modified by a premarital agreement executed prior to marriage or a postmarital agreement executed during the marriage.  This would allow the spouses to leave their estates as they see fit.  Such an agreement would be particularly important when someone is currently in or about to enter in to a second or subsequent marriage, and wants to leave all or the majority of their estate to family members other than their spouse.

Gregory S. Williams is an estate planning attorney with Carruthers and Roth, P.A. He can be reached at 336.478.1183 or gsw@crlaw.com.

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