Can you leave a surviving spouse a choice between a statutory minimum benefit and an alternative bequest? In Dinkins v. Dinkins, 2013 Fla. App. LEXIS 11732 (Fla. Dist. Ct. App. 5th Dist. July 26, 2013), the Florida appellate court said yes – a choice is acceptable.
The Decedent’s estate plan left the surviving spouse a lifetime interest in a trust (called a QTIP Trust). The estate plan also provided that if the surviving spouse were to disclaim her interest in the QTIP Trust and waived her right to the elective share, she would receive an immediate cash distribution of $5 million.
Under Florida law, a surviving spouse is entitled to several . These rights include the , which is 30% of the estate of a decedent.
The surviving spouse argued that she should receive the interest in the trust, her elective share, AND the $5 million cash bequest. The widow argued that the choice provision was essentially a penalty clause because it would penalize her for taking the elective share by causing her to forfeit the $5 million cash bequest.
In rejecting the argument that the choice between the cash bequest and the surviving spouse right of elective share was an invalid penalty clause, the court explained as follows.
Under a no contest clause, in order to receive the devise, the beneficiary must forfeit the right to contest the instrument. But that right is essential to the integrity of the estate disposition process, because beneficiaries must be able to obtain, and courts must be able to provide, a determination of the instrument’s validity. * * * Thus, a beneficiary cannot be forced to choose between the right to contest an instrument and the right to take under it, and this public policy is codified in section 736.1108(1) and its probate analogue, section 732.517.
On the other hand, under a clause providing an alternative to a statutory minimum benefit, to receive the alternative devise, the beneficiary must forfeit the right to receive the statutory benefit. The purpose of statutory minimum benefits is generally to ensure that surviving family members are provided for and do not become dependent on the public treasury, regardless of the decedent’s intent. * * * This purpose is not thwarted by providing an optional alternative devise, because the beneficiary is free to reject it for any reason, including that it is less valuable than the statutory benefit. The purpose of the statutory benefit is satisfied, because the beneficiary has the ability to choose an option at least as valuable as the statutory minimum. Therefore, unlike a no contest clause, an alternative devise clause does not undermine the purpose of the legal right forfeited, and thus does not penalize the beneficiary for purposes of section 736.1108(1).