Take-Away: An overlooked provision of the Estates and Protected Individuals Code (EPIC) is the statute that gives to a surviving spouse intestacy rights to a portion of the deceased spouse’s estate when the surviving spouse is not mentioned in the deceased spouse’s Will. This statutory inheritance right is different from a surviving spouse’s right to elect against the deceased spouse’s Will. Unlike many states that use the ‘augmented estate’ concept to identify the size of the deceased spouse’s estate against which elective rights are exercised, Michigan  narrowly construes a decedent’s estate for elective right purposes, which is restricted to the decedent’s probate estate, and thus excludes the decedent’s funded revocable living trust against which an elective right would otherwise be exercised. As such, triggering the pretermitted spouse statute could result in more of the decedent’s estate passing to the surviving spouse than a surviving spouse’s election against the decedent’s Will. This statute could present a surprising result in today’s world of serial marriages and blended families.

Pretermitted Defined: A pretermitted spouse is a spouse who has been omitted from a Will. This term is used to refer to a spouse who would likely stand to inherit under a Will, but was not named in the Will because he/she was not yet married to the testator at the time the Will was executed. Source: US Legal, Inc.

Background: If a deceased spouse did not have children from a prior marriage where assets are left to those children (outright or in trust) a surviving spouse who marries the testator after the testator executes his/her Will, is entitled to receive, as an intestate share, not less than the value of the share of the decedent’s estate the surviving spouse would have received if the testator had died intestate as to that portion of the testator’s estate. 26 states have adopted some form of a pretermitted spouse statute, including Michigan. [MCL 700.2301(1).] While the decedent-spouse dies leaving a Will, a surviving spouse who is not mentioned in the Will may be able to take what amounts to a full intestate share of the decedent-spouse’s estate had the testator died without a Will.

  • Amount of Estate: Note that the surviving spouse’s ‘intestate succession share’ [MCL 700.2102 (1)(f)] may be larger than the amount that is available to the surviving spouse if he/she elected against the deceased spouse’s Will. [MCL 700.2202(2)(b).] The survivor’s elective share is one-half of the sum or share that would have passed to the surviving spouse had the testator died intestate, then reduced by the value of outside testamentary transfers to that surviving spouse. A pretermitted spouse (omitted from the Will because the marriage came after the Will’s execution) is entitled to his/her full (100%) ‘intestate succession share’ of the decedent’s estate.
  • Statutory Exceptions: The pretermitted spouse statute contains several exceptions: (i) from the Will or other evidence it appears that the Will was made in contemplation of the testator’s marriage to that surviving spouse; (ii) the Will expresses the testator’s intention that it is to be effective notwithstanding a subsequent marriage; and (iii) the testator provided for the surviving spouse by a transfer(s) outside of the Will and the testator’s intent is that the ‘outside’ transfer(s) is a substitute for the testamentary provision is shown by the testator’s statements or that the testator’s intent is reasonably inferred from the amount of the ‘outside’ transfer to the surviving spouse or from other evidence. [MCL 700.2301(2).]
  • Elective Share: If this ‘intestate succession share’ is smaller than the survivor’s ‘elective share’ then it is applied towards the survivor’s elective share amount. If the ‘intestate succession share’ is greater than the survivor’s elective share, then the survivor will receive this ‘intestate succession share’ even if he/she elects to abide by the terms of the testator’s Will. [MCL 700.2301(4).] In In re Estate of Sprenkle-Hill, 265 Mich App 254 (2005) the Court held that the surviving spouse’s elective share under MCL 700.2202 is also available in addition to the ‘intestate succession share’ that is provided by MCL 700.2301 for a pretermitted spouse.
  • Children: Excluded from this ‘intestate succession share’ is any property that is devised to, or in trust for the benefit of, a child who was born before the testator married the surviving spouse, i.e. a child who is not the surviving spouse’s child. In Warren v. Warren, No. 262937, 2006 Mich App LEXIS 3399(Nov 16, 2006) the Court found that because the decedent left all of his assets in trust for his son, his pretermitted spouse received nothing under MCL 700.2301.

Recent Example: The following is a summary of a Pennsylvania Supreme Court decision In re Trust Under Deed of David P. Kulig, dated January 12, 2001, 175 A.3d 222 (Pa 2017) which narrowly interpreted Pennsylvania’s pretermitted spouse statute, but which also gives some idea how a pretermitted spouse statute might be interpreted. Pennsylvania’s pretermitted spouse statute is a bit different from Michigan’s statute because it’s does not protect bequests or devises to the testator’s descendants or children from a prior marriage, unlike Michigan’s pretermitted spouse statute.

  • Facts: David adopted a revocable trust in 2001. David’s wife of 35 years predeceased him. David executed a new Will after his wife’s death, but he did not amend his revocable trust. David then married Mary Jo late in 2011. David did not amend his Will or his trust after his marriage to Mary Jo. David died 35 days after his marriage. David was survived by Mary Jo and two children from his first marriage. David left a probate estate of $2.1 million, with another $3.3 million held in his revocable trust, and another $1.5 million in David’s employer’s qualified retirement plan.
  • ERISA: Mary Jo received David’s entire retirement plan account due to ERISA’s ‘automatic’ joint and survivor spousal annuity rules.
  • Elective Share Rights: Mary Jo could have elected against David’s Will. Pennsylvania uses the ‘augmented estate’ concept to determine the amount of a surviving spouse’s elective share; this would result in both of David’s probate estate and his non-probate estate assets (his trust) to be subject to Mary Jo’s elective rights, reduced by an offset for the retirement account assets that Mary Jo directly received. An exercise of her elective rights would have resulted in Mary Jo receiving roughly one third of David’s probate and non-probate (trust) assets, less the entire retirement account balance. Consequently, Mary Jo did not claim an elective share of David’s estate because the offset of the ERISA plan account balance would have reduced her elective share close to $0.00. Instead Mary Jo asserted what I would best describe as ‘enhanced’ pretermitted ‘intestate succession share’ right.
  • Pretermitted Share Rights: Mary Jo’s pretermitted spouse claim was novel in that it was based on an interpretation of the Pennsylvania Trust Code which tends, like many other states that have adopted variations of the Uniform Trust Code, to treat a revocable trust as a Will substitute. Mary Jo’s pretermitted spouse claim was based on both David’s probate estate and also David’s funded revocable living trust (she claimed that the funded trust was actually a part of the David’s probate estate since the trust was merely David’s Will substitute), with no offset for the ERISA plan benefits that she received. This assertion would have expanded Mary Jo’s pretermitted spouse shared from $2.55 million to almost $4.2 million.
  • Courts: Both the trial court and the mid-level appellate court endorsed Mary Jo’s ‘expansive’ interpretation of the Pennsylvania pretermitted spouse statute noting that the revocable trust was only a Will substitute. The Pennsylvania Supreme Court rejected that expansive interpretation of the pretermitted spouse statute. In doing so that Court focused on the Pennsylvania elective share statute noting that its legislature had deliberately included certain assets in what could be elected against by a surviving spouse, while excluding other assets: “thus, the legislature intended to address a spouse’s ability to claim non-probate assets through its elective share statute, and not through its pretermitted spouse statute.”
  • Distinguishing Factor: Key to the legal dispute that Mary Jo created was that Pennsylvania adopted a provision of the Uniform Trust Code, [UTC 112] that pretty much says that the rules of construction afforded Wills are also applied to trusts (revocable and by implication irrevocable) in Pennsylvania. That is where Mary Jo’s Will substitute‘ argument originated when she tried to expand the size of the asset pool against which her pretermitted rights were to be calculated to include David’s funded trust.
  • Michigan’s version of UTC 112 is much more narrow: “The rules of construction in sections 2605 to 2608 that apply to this state to the interpretation and disposition of property by Will also apply as appropriate to the interpretation of the terms of a trust and the disposition of trust property.” [MCL 700.7112.] Limiting those rules of construction of a trust to sections 2605 to 2608 greatly narrows the application of what is imported to and used to construe trust disposition provisions in Michigan. [2605- Increase in securities; accessions; 2607- non-ademption of specific devises; unpaid proceeds of sale; condemnation or insurance proceeds; sale by conservator or agent; 2607- non-exoneration (property passes subject to mortgage or security interest); and 2608- ademption by satisfaction.]

Possible Effect of Pretermitted Spouse’s Award?: Consider, however, the size of the pretermitted spouse’s award or right or claim (‘entitled to receive.’) It is the right to receive an amount that is equal to what that surviving spouse would have received had the decedent-spouse died intestate. If the decedent-spouse’s probate estate is insufficient to pay debts, administration expenses, estate taxes and the amount the pretermitted spouse is entitled to receive, can the personal representative of the deceased spouse’s probate estate submit a claim to the trustee of the now irrevocable trust for the distribution of an amount that is sufficient to satisfy the pretermitted spouse’s claim against the probate estate? Restated, can the pretermitted spouse indirectly access assets from the deceased spouse’s trust, which the surviving spouse could not access if an election was made by the pretermitted spouse against the deceased spouse’s Will ( the elective right being limited to the decedent’s probate estate?) Is this one way for a pretermitted spouse to circumvent the probate estate restriction of the Michigan spousal elective right statute to access the decedent’s trust?

Revocable Trust: Probably a revocable trust would not be invaded to satisfy a pretermitted spouse’s claim since the Michigan Trust Code directs a trustee of revocable trust, on the settlor’s death,  to pay the personal representative of the settlor’s estate the amount that the personal representative certifies in writing to the trustee he/she is required to pay the administration expenses of the settlor’s estate; an enforceable and timely presented claim of creditor of the settlor, including a claim for the settlor’s funeral and burial expenses, and homestead, family and exempt property allowances. [MCL 700.7606(1).] No reference is made to an elective share paid to a surviving spouse nor to the amount otherwise payable to a pretermitted spouse of the settlor. This exclusion turns, then, on whether the pretermitted spouse would be considered a creditor of the settlor, which I doubt would be the case.

Conclusion: As noted at the beginning, we live in a time of serial marriages and blended families where it is possible that a spouse will not be named in a testator’s Will. If there is no evidence that the omission was intentional, the surviving spouse may have a claim as a pretermitted spouse which could produce a much larger share of the decedent’s total estate (an amount equal to 100% of their intestate share amount) than would be available if the survivor claimed an elective share against the deceased spouse’s estate.