May 24, 2019

Colorado Court of Appeals: Surviving Spouse Not Entitled to Minimum Elective Share When Nonprobate Assets Exceeded Elective Share Amount

The Colorado Court of Appeals issued its opinion in In re Estate of Cloos on Thursday, November 15, 2018.

Probate—Elective Share—Supplemental Elective Share.

The decedent devised her entire estate to her daughter, Jean Ann. Because the will devised the entire estate to Jean Ann, Jean Ann’s father, Cloos (who was the decedent’s husband), made statutory claims for shares of the estate. He claimed a $32,000 family allowance (FA) and a $32,000 exempt property allowance (EPA). He also petitioned for a supplemental elective share of the marital property. Jean Ann was the original personal representative (PR), but the court later appointed Findley as successor PR due to mutual distrust between Jean Ann and Cloos. Findley approved the sale of the marital home to Cloos to be paid with credits for his FA and EPA claims and gave Cloos a credit of $50,000 from probate estate funds for his “statutory minimum elective-share,” as well as 48,500 cash, which was the only asset in the estate. The district court granted a final settlement of the estate.

On appeal, Jean Ann contended that the district court erred by allocating $50,000 in elective-share funds from the probate estate to Cloos. A surviving spouse married for 10 years or more is statutorily entitled to an elective share of marital assets equal to (1) 50% of the augmented estate (standard elective share), or (2) $50,000 (supplemental elective share), whichever is greater. In satisfying the $50,000 amount, the surviving spouse’s own title-based ownership interests count first; for this purpose, the survivor’s assets include amounts transferred to the survivor at the decedent’s death and amounts owing to the survivor from the decedent’s estate under the elective share formula.

In this case, Cloos’s share of marital assets in real estate interests alone far exceeded $50,000 because he owned half of the Fort Collins house (appraised at $325,000) and all of the Wyoming cabin (assessed at $277,000). Therefore, Cloos is not entitled to a supplemental elective share of the estate, and it was error to credit him with a supplemental $50,000 of probate estate funds toward his purchase of the Fort Collins house. However, the record does not contain a calculation of the augmented estate at the time of the decedent’s death. While it appears from the limited information in the record that Cloos held well over 50% of the augmented estate and was thus not entitled to any further assets from the probate estate, there is no evidence in the record that the successor PR calculated either the actual value of the augmented estate or the percentage held by Cloos. It is thus unclear whether Cloos was entitled to any standard elective-share credit toward the house.

The order approving the final settlement of the estate was reversed and the case was remanded with directions.

Summary provided courtesy of Colorado Lawyer.