Spouse’s Legal Rights to a Deceased’s Spouse’s Assets

What legal rights one spouse has to assets when the other passes away depends on state laws and whether or not a valid will exists.

Community vs. Separate Property

In a community property state, all property acquired by either spouse during the marriage is presumed to be community property. This typically includes employment income earned during the marriage, any property purchased with employment income, and any separate property that a spouse has given to the community. Separate property is any property acquired before the marriage, any property acquired through inheritance or gift, and any property covered by an express agreement between the spouses to keep it as separate property.

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Community Property States

In a community property state, each spouse owns half of the interest of the marital property. Consequently, upon death, spouses have the right to dispose of their share of community property in whatever way they see fit. For example, a spouse may specify in his or her will that upon his or her demise, someone other than the surviving spouse will inherit his or her half of the community property. A spouse cannot distribute the other spouse’s share of the community property, absent a prenuptial agreement to the contrary. However, a spouse has the sole right to dispose of their separate property. Accordingly, a deceased spouse can distribute both their separate property and their share of the community property in a will.

Separate Property States

Fortunately, the majority of states are non-community property states. In non-community property states, a spouse is not automatically entitled to half of the interest in all property acquired during the marriage. This is because both spouses do not necessarily own all property acquired during the marriage. Rather, ownership is determined by whose name is on the title or by establishing which spouse’s income purchased the property, although courts seek an equitable distribution of such assets.

A surviving spouse in such a state has protection from being completely disinherited. Through what’s known as elective share, a surviving spouse has a right to claim a portion of the deceased spouse’s estate regardless of what a will may state. Typically, this share is anywhere between one-third to one-half, depending on state law. This means, if a deceased spouse chooses to leave an amount less than the amount required by statute, a surviving spouse may make a claim to their elective share, unless there is a written agreement providing otherwise. This applies to any assets in a decedent’s estate.

Assets Outside the Family Estate

Regarding any assets that would pass outside of an estate, the laws and procedures are not the same. For example, if a non-spouse receives the proceeds of an insurance policy or they are designated as a beneficiary on a bank or like account, in most states, a surviving spouse would have no claim on these assets. These types of assets are considered non-probate assets. There are exceptions to this rule. In recent years, a handful of jurisdictions have allowed a surviving spouse to make an elective share claim against non-probate assets. In addition, if a spouse dies without a will, known as intestate (click here for more information regarding what happens when a person dies without a will), every state provides that a surviving spouse be given a portion of a deceased spouse’s estate. The share is has been established by applicable intestacy statutes. These statutes usually allow for one-half to one-third of the spouse’s estate.

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Case Studies: Spouse’s Legal Rights to a Deceased Spouse’s Assets

Case Study 1: Community Property State

In the state of California, Jack and Sarah are married. During their marriage, they acquired several properties and assets together, including a family home, a vacation house, and joint bank accounts. Unfortunately, Jack passes away without leaving a will.

In this community property state, Sarah is entitled to half of the interest in the marital property. As a result, Sarah inherits Jack’s share of the community property, including their family home and other jointly owned assets. However, she cannot distribute Jack’s share of the community property to someone else without a prenuptial agreement stating otherwise.

Case Study 2: Separate Property State

John and Emily are married in New York, a separate property state. Throughout their marriage, John purchased a valuable piece of artwork using his personal funds. When John dies, his will stipulates that he wants his best friend, Mark, to inherit the artwork.

In this case, since New York is a separate property state, John had the sole right to dispose of his separate property, including the artwork. Therefore, Emily, as the surviving spouse, does not have a legal claim to John’s separate property, and Mark will inherit the artwork according to John’s wishes.

Case Study 3: Elective Share in Non-Community Property State

Lisa and Michael are married in Texas, a non-community property state. During their marriage, they jointly purchased a house, and Michael had a separate investment account. Unfortunately, Lisa passes away without a will.

In Texas, a surviving spouse has the right to claim an elective share of the deceased spouse’s estate, which can range from one-third to one-half of the estate, depending on state law. In this case, Lisa, as the surviving spouse, can claim a portion of Michael’s estate, including their jointly owned house and his separate investment account, even if Michael’s will does not mention her.

Case Study 4: Non-Probate Assets

Sarah and David, a married couple, reside in Florida. David has a life insurance policy and designates his sister, Mary, as the beneficiary. When David passes away, the proceeds from the life insurance policy are paid directly to Mary.

In Florida, a surviving spouse would not have a legal claim to these non-probate assets, such as life insurance proceeds, if they are designated to a specific beneficiary. However, if David had not designated a beneficiary or had died without a will, Sarah, as the surviving spouse, would be entitled to a portion of David’s estate according to the state’s intestacy laws.

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