Florida's Spousal Elective Share and Life Insurance

Under Florida law, a spouse has the right to receive 30% of certain of his or her deceased spouse's assets. This is true notwithstanding whether the deceased spouse has excluded his or her spouse under his or her Last Will and Testament or Trust. So if the deceased spouse died having a Will which left nothing to his or her spouse, then the surviving spouse could still receive 30% of the applicable assets. The surviving spouse would have to make an election under Section 732.201, Fla. Stat. in order to be entitled to receive this share.

Section 732.2035, Fla. Stat. describes what assets are included in the spousal elective share. A life insurance policy is a major type of asset which a person may leave to his or her beneficiaries. Is life insurance included in the elective share? The answer is a resounding "partially." The statute provides that the elective share includes "[t]he decedent's beneficial interest in the net cash surrender value immediately before death of any policy of insurance on the decedent's life" (emphasis added).

Life insurance policies include two monetary benefits. All life insurance policies pay a death benefit. Some types of life insurance also build up a cash value. These include "whole life" and "universal life" policies. "Term life" policies do not typically build cash value. So for whole life and universal life policies, the cash value can be included in the elective share.

What the elective share does not include is the death benefit payable under the life insurance. This is important because the death benefit is often a larger benefit or amount than the cash value. The cash value of the policy depends on how much is paid into the policy. Typically, the longer the policy has been paid, the more the cash value will be. However, the amount of the death benefit will depend upon the terms of the policy and could be payable from day 1.

By way of example, consider a situation where a person has a whole life policy with a death benefit of $250,000 and pays premiums for ten years. If the policy builds a cash value of $3,500 before the person dies, then the $3,500 would be included in the elective share. However, what would not be included is the $250,000 death benefit-that would pass to the designated beneficiary and would not be reduced by or included in the elective share. If the deceased person named a beneficiary of the policy other than his or her spouse, then all of the death benefits would go to that other person and the spouse would not receive them as part of the elective share.

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