Sunday, 16 June 2024

Estate planning: Inheritance rights of a surviving spouse

Marriage combines marital status and financial responsibilities. The latter affects the inheritance rights of a married spouse, or ex spouse, to inherit as a beneficiary under the decedent’s will; as a beneficiary under the decedent’s trust; as a designated beneficiary of the decedent’s non-probate assets (e.g., retirement plan, annuity, joint tenancy, annuity or life insurance); or as the decedent’s intestate heir (e.g., probate without a will).

Now, let’s explore the contours of this terrain.

“Surviving spouse” is a statutorily defined term relevant to the inheritance rights of married and formerly married persons of a deceased person to whom they were once married. “Surviving spouse” includes any married person whose marriage was neithe

r dissolved nor annulled, no matter how short.

It even includes a married person living separately at the time of death, even if a divorce was pending; provided, however, that marital property rights were not legally terminated, that is, no court ordered separation judgment was issued. That last proviso, as we shall see, however, appears only to pertain to inheritance by intestacy (where someone dies without a will).

With respect to probates (e.g., wills and intestacy), a person who is not a surviving spouse, because of dissolution or annulment, no longer inherits under their ex-spouse’s will, which was signed during marriage, unless the will expressly provides otherwise. The same applies to intestate probates.

But, in contradiction to the definition of “surviving spouse,” a decree of legal separation which does not terminate the status of husband and wife, however, is not a dissolution, and so will not prevent inheritance under a will, although it will prevent inheritance by intestacy.

A similar, but different, set of rules applies to inheriting as a designated beneficiary of non-probate assets such as trusts, IRAs, pay-on-death accounts and joint tenancy assets, but not life insurance. That is, any dissolution or annulment precludes inheritance on death transfers which were authorized during the marriage.

Again, a decree of legal separation which does not terminate the status of husband and wife is not a dissolution and so will not preclude inheritance of any non probate assets by a person who otherwise satisfies the definition of “surviving spouse”.

Furthermore, certain special exceptions may apply to allow a person who is not a “surviving spouse” to still inherit as a designated beneficiary of a non-probate “transfer at death” authorized during marriage. That is, if the transfer was not subject to revocation at death; could not be changed due to court order (e.g., during a pending divorce proceeding); or there is clear and convincing evidence that the deceased transferor intended to preserve the non-probate transfer, then a surviving ex-spouse may still inherit .

Next, regarding employer provided ERISA retirement plans (e.g., 401(k)s), which are non-probate assets, relevant federal law determines a surviving ex-spouse’s right of inheritance and preempts any conflicting state law to the contrary.

Lastly, the foregoing discussion shows why married persons need to act prospectively in keeping their testamentary wishes current, and should do so sooner rather than later.

Obviously, when married persons are already involved in court dissolution proceedings, however, it may become difficult (and sometimes impossible) to effectuate changes due to statutory prohibitions against changing designated beneficiaries on non probate assets, and/or due to court orders preventing such changes.

While not discussed above, what changes married persons can make to their wills, trusts, and non-probate assets (e.g., joint tenancies, retirement plans, life insurance) prior to, during and after their dissolution of marriage proceedings (terminating their marriage), is itself an important subject – one worthy of a future article in this column.

Dennis A. Fordham, attorney (LL.M. tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 55 1st St., Lakeport, California. Dennis can be reached by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 707-263-3235.

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