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This is a small estate where the spouse’s claims as allowed under the Estates and Protected Individuals Code (EPIC) may in fact diminish the estate to the point where there is very little to distribute to the decedent’s other heirs. In this case the spouse will also make a claim under MCL 700.2402 for a homestead allowance, a claim for a family allowance under MCL 700.2403 and claim under MCL 700.2404 for exempt tangible property. While it appears clear that the homestead allowance, family allowance and exempt tangible property are in addition to what the spouse would otherwise receive, and have priority over other claims, such as funeral and administrative expenses, it is not clear that the same is true of the election under MCL 700.2202(2)(b).
Question No. 1: Does the spouse receive one half of the value of the entire estate, ( i.e. estate valued at $80,000.00 spouse would receive $40,000, after deduction of the allowances and exempt property), or regardless of the value of the estate, does she receive the “first” $50,000.00 (pursuant to MCL 700.2102(f) ) after the deduction of the allowances and exempt property amounts. (there is no other property derived by the spouse from decedent which would reduce either of these amounts.)
Question No. 2: Further, must the personal representative, after deducting the allowances and amount of exempt property, first deduct and pay claims such as funeral and administrative costs prior to distributing the spouse’s elective share under MCL 700.2202(2)(b), or does her share have priority over these claims.
(b) That the spouse will take 1/2 of the sum or share that would have passed to the spouse had the testator died intestate, reduced by 1/2 of the value of all property derived by the spouse from the decedent by any other means other than testate or intestate succession upon the decedent's death.An intestate share passing to a spouse is determined after the payment of allowances and claims. Therefore, the elected share is calculated from what would be the spouse's intestate share of the net estate. This share is then reduced by 1/2 and reduced further for property derived by the spouse from the decedent by any other means other than testate or interstate succession upon the decedent's death.
For example, the calculation would be as follows under the following assumed facts. The estate consists of $300,000 in assets. There is a surviving spouse and there are children who are not children of the surviving spouse. Allowances for the surviving spouse are determined to be $40,000. Claims allowed against the estate are $50,000. The spouse received a $10,000 bank account on which she was the joint owner with the deceased.
It is our opinion the you would subtract both the $40,000 and the $50,000 from the gross estate leaving a net estate of $210,000. The spouse would have received an intestate share from this of the first $100,000 and 1/2 the balance for a total amount of $155,000. This would be reduced by 1/2 to $77,500 and reduced further by $5,000 to $72,500. Thus the surviving spouse would receive from the estate the allowances of $40,000 and the elected share of $72,500.
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Last Updated: 2-10-01
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