Chapter 13 - § 13.13 • EFFECT OF ELECTION ON RIGHTS UNDER WILL

• Jurisdiction: Colorado

§ 13.13 • EFFECT OF ELECTION ON RIGHTS UNDER WILL

Under former law, it appeared quite clear that the spouse who elected against the decedent's will could not take any of the benefits provided by the will.⁴³ Under the Code, this is not true since, under the election, the spouse takes both the probate and non-probate benefits provided by the spouse, with the difference being made up by contributions from third-party successors. In addition, as to the spouse's probate interests, the Code gives the electing spouse the alternative of accepting or rejecting the provisions of a testamentary trust created under the will for his or her benefit.⁴⁴ If the provisions of the trust are accepted, the value (difficult to value if the trustee has a power of invasion of corpus) is charged against the share of the surviving spouse.⁴⁵

In Estate of Grassechi,⁴⁶ the surviving spouse purported to disclaim a life interest in a trust established by the decedent. The disclaimer was made substantially beyond the nine-month period provided in C.R.S. § 15-1-901. The surviving spouse had made a timely augmented estate election under C.R.S. § 15-11-205. The question was whether the disclaimer would be given limited effect; that is, whether the trust interest could be disclaimed so as not to be counted as part of the spouse's share of the augmented estate. The court held that the specific statutory disclaimer time limit did not apply in connection with the implementation of an augmented estate election.

If the provisions of the trust are renounced, there is no effect on the surviving spouse, and the overall effect, in the elective share context, is that a trust provision, even a marital deduction qualifying a qualified terminal interest property or power of appointment trust, may be converted to a full outright interest.

Under prior law, an election "against the will" would deprive the surviving spouse of the benefit of a favorite tax apportionment clause. Under the provisions of the Colorado death tax apportionment statute,⁴⁷ however, in cases of an omitted spouse⁴⁸ or an elective share, the tax apportionment statute prevails over a provision in the governing instrument (at least as to the interest of the spouse). Since the interest of the spouse under an election passes outright and qualifies for the federal estate tax marital deduction, the effect will be that the share of the spouse will pass tax-free, despite language in the instrument to the contrary. This was the case in Estate...