Working With the New Augmented Estate
| Publication year | 1995 |
| Pages | 2337 |
1995, October, Pg. 2337. Working with the New Augmented Estate
In seeking to clarify the meaning of the new statute, it may be helpful to start with an overview. First, the new augmented estate may be pictured as a big box, labeled "augmented estate" ("AE"), into which will be put nearly all of the assets of both husband and wife---in other words, the assets of the team as a whole.
Next, within the big AE box, there are five smaller boxes, each representing a specific type of property that will be included in the augmented estate. As assets are put into the big AE box, the assets are sorted into one of the five smaller boxes. These boxes are labeled "pe," "A1," "A2," "B" and "W," as explained below. Every asset included in the augmented estate goes into one, and only one,(fn2) of the five smaller boxes. The statute determines which assets are put into which of the smaller boxes.
Once all of the team assets have been collected into some box included in the AE box, the surviving spouse is entitled to elect to take a fractional share of the total augmented estate. The size of the fraction is determined by how long the team members, the husband and wife, have been married to each other. For example, for a four-year marriage, the surviving spouse would be entitled to elect 20 percent (or 1/5) of the augmented estate. For a marriage that had lasted ten years or more, the surviving spouse would be entitled to elect 50 percent (or 1/2) of the augmented estate.(fn3)
The statute, and the following formulas, indicate from which of the smaller boxes within the augmented estate the surviving spouse is permitted to take his or her elective share. The first three formulas that have proven useful in translating the new augmented estate statute are:
1) AE = pe + A1+A2 + B + W
2) C = D + B + 2PW
3) g = PAE - C
Following are explanations of how the formulas are derived from the statute and how each one works.
First, according to the statute:
AE, the AUGMENTED ESTATE, is composed of:(fn4)
pe, the PROBATE ESTATE,(fn5) plus
A1, nonprobate assets given AWAY to others with various strings attached (such as the right to receive income),(fn6) plus
A2, property given AWAY within TWO years of death---either by cutting various strings or by outright gifts exceeding $10,000 to anyone donee within either of the two years prior to death,(fn7) plus
B, the value of property passing at the decedent's death from the decedent to the surviving spouse outside the probate estate (such as the decedent's share of a joint checking account),(fn8) plus
W, the property owned by the WIDOW or WIDOWER at the decedent's death, from any source (including the surviving spouse's own earnings; property that the decedent, or anyone else, gave to the surviving spouse not in joint tenancy); and property that would have been included in A1 or A2 if the surviving spouse had died first).(fn9)
The statute provides that certain kinds of property simply are not to be included in the augmented estate in any category.(fn10) However, with the exception of those specific exclusions, the big AE box now contains all of the property of both team members, the husband and the wife. Thus, the property included in the augmented estate is described by the first formula:
Next, it is important to ascertain which property in the AE box will be given to the surviving spouse as part of his or her elective share. It is at this point that the complexity of the statute begins to become most apparent.AE = pe + A1 + A2 + B + W
First, it should be emphasized that in ascertaining the surviving spouse's share
shows what the spouse is CONSIDERED to have, before electing, under the statute. For this formula:C = D + B + 2PW,
C equals what the surviving spouse is CONSIDERED to have,
D equals the property the surviving spouse got by DESCENT or DEVISE from the decedent's probate estate. (The D property comes out of the smaller box labeled "pe" in the augmented estate because property that comes by DESCENT or DEVISE must come from the probate estate--- either by DESCENT under the intestate statute, or by DEVISE under the terms of a will.) So, by...
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