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Used to prevent T from using non-probate assets to reduce size of probate estate, and thus the size of the elective share
A compilation of ALL the following property (Testamentary Substitutes need a LEG UP)
o Totten Trusts
Trust bank account for a beneficiary - money goes automatically to beneficiary upon death
Also includes other Pay on Death security arrangements
o Survivorship Rights
Joint Tenancies, Tenancies by the Entirety, Joint Bank Accounts, Survivorship Bank Accounts
NOTE: total value generally NOT included
o Lifetime Transfers with Strings Attached
Those where T retained power to revoke, invade/consume/dispose of principal, or name new beneficiaries
Transfers made during marriage, even if revocable, if decedent retained a life estate assuming transfer made on or after 9/1/92
o Employee Pension, Profit-Sharing, and Deferred Compensation Plans
If a qualified plan, then only ONE HALF is added, regardless of beneficiary
o Gifts Made within ONE YEAR of Death
MUST exceed annual gift tax exclusion ($14,000) to be part of AE
Gifts causa mortis (made in fear of impending death) are part of AE regardless of amount
o U.S. Government Bonds and Other Pay on Death Arrangements
o Powers of Appointment
Property over which decedent held a presently exercisable power of appointment at time of death, or exercised such power within one year of death
Property NOT included (LOGPIT)
o Life Insurance
Even when payable to the party
o One Half off a Qualified Pension or Profit-Sharing Plan
Outside AE ONLY if decedent named the beneficiary before 9/1/92 and did not change it after
o Gifts Less than Annual Exclusion Made Within One Year of Death
o Premarriage Irrevocable Transfers
Eg, Gifts prior to marriage
o Irrevocable Transfers Made More than ONE YEAR Before Death
o Irrevocable Transfers Made During Marriage where Decedent Retained Life Estate If provides for sufficient amount to spouse, she cannot exercise elective share right. These trusts could only prevent the elective share before 1994. Today, they have no bearing on that right, and exercising it will treat the surviving spouse as predeceased for purposes of the Trust.
Decedent died before 9/1/94
o Could defeat right to an elective share through use of elective share trust that gave surviving spouse a life estate of income interest for life, as long as she was given at least $50,000
o If sum of outright disposition $50,000 and principal of the trust equaled or exceeded the 1/3 elective share amount, then surviving spouse had no right of election
Died after 9/1/94
o Life estates will NOT satisfy the surviving spouse's elective share entitlement
o If surviving spouse files for an elective share, trust is read as if surviving spouse predeceased decedent and interest of the remainder beneficiaries are accelerated
Thus, the spouse has no rights in the trust as we are treating the spouse as being deceased
• The amount left in trust is treated as not passing in any way to the surviving spouse under the trust.
If trust funds are needed to pay the elective share, the trust is, in effect, killed Surviving spouse is entitled to certain exempt personal property up to $92,500
o In addition to elective share
Composition of Exempt Property
o One car not to exceed $25,000
o Furniture, appliances, electronics, etc not to exceed $20,000
o Cash up to $25,000
NOT subject to creditor's claims, except funeral expenses
o Animals, farm machinery, tractors, etc, not to exceed $20,000
o Books, DVDs, CDs, software up to $2,500 