Blog

North Carolina Elective Share

March 7, 2018

Estate Planning

Introduction to the Elective Share

The statutory elective share is designed to prevent someone from disinheriting his/her spouse.  Upon a spouse’s death, the statute grants the surviving spouse the opportunity to receive a minimum amount of assets from the deceased spouse.  

In order to qualify for the elective share, the surviving spouse must have received less than the statutory minimum amount through either probate assets or non-probate assets (hereinafter “Total Net Assets”).  

Probate assets include those that pass through a Will or through intestacy. Non-probate assets may include various assets that pass automatically at death such as survivorship property, bank accounts, life insurance, and retirement accounts.  The surviving spouse must make a claim for his/her elective share within six months after the issuance of letters testamentary or letters of administration.

The Elective Share Calculation

In 2013, North Carolina dramatically changed the statutory elective share calculation.  The current version no longer takes into consideration the deceased spouse’s prior marriages or children; the only consideration is the length of the marriage.  The maximum elective share is equal to 50% of the Total Net Assets.  This maximum amount occurs after the spouses are married for 15 years.  

• Between 10 and 15 years of marriage, the elective share is 33%
• Between five and 10 years of marriage, the elective share is 25%
• When the length of the marriage is less than five years, the elective share is 15%.

Two Examples

A:  John and Sarah were married for 3 years when John suddenly dies.   John’s Will specifically disinherits Sarah, but he had a $50,000 life insurance policy payable to Sarah.  John’s Total Net Assets equal $500,000, including the couple’s home, which was survivorship property (transferring to Sarah automatically) and valued at $100,000.  The life insurance and home make her ineligible for the elective share because they are collectively valued at $150,000 and the elective share amount in this scenario would only be 15% of $500,000 ($75,000).  

B:  Assume instead that John and Sarah were married for 11 years and John’s Total Net Assets upon his death are valued at $3,000,000.  This time, Jane is entitled to 33%, which would be $990,000. In this situation, Sarah would have an elective share claim because she only received $150,000 worth of assets.

If you have any questions or concerns about the elective share, estate planning, or estate administration, contact Helms Law Group, P.A. at 704.289.4577. We will be happy to help.