Is Non Probate separate Property That Increases in Value During a Marriage Part of the Elective Share Calculation?

The 2nd District Court of Appeals for Florida held in McDonald v Johnson that the increase in a company stock value that happened during the marriage can be used to determine the value of an elective share calculation. The lower court ruled that the surviving spouse had no right to discovery of a company’s financial information because the company stock was not subject to probate. The 2nd DCA found that Section 742.2155(6)(c) excluded non-martial assets as defined in Section 61.075. Because the increase in value of an asset that happens during a marriage is a martial asset, they concluded that the spouse was entitled to do discovery that was necessary to determine if it would be to her benefit to claim an elective share.

Section 732.2155(6) provides as follows:
Sections 732.201-732.2155 do not affect any interest in property held, as of the decedent’s death, in a trust, whether revocable or irrevocable, if:

(a) The property was an asset of the trust at all times between October 1, 1999, and the date of the decedent’s death;
(b) The decedent was not married to the decedent’s surviving spouse when the property was transferred to the trust; and (c) The property was a non-marital asset as defined in s. 61.075 immediately prior to the decedent’s death.

The courts reasoning is as follows:

We conclude that the fact that section 732.2155(6)(c) cites to section 61.075 without a specific citation to the subsection defining non-marital property indicates the legislature’s intent that the entire statute, which defines both marital and non-marital property, is to be considered in determining whether the property in the revocable trust was non-marital at the time of death. The definition of marital assets includes “[t]he enhancement in value and appreciation of non-marital assets resulting either from the efforts of either party during the marriage or from the contribution to or expenditure thereon of marital funds or other forms of marital assets, or both.” ยง 61.075(6)(a)(1)(b), Fla. Stat. (2010). In other words, if the value of the MCC stock in the decedent’s revocable trust increased pursuant to the terms of section 61.075(6)(a)(1)(b), that increase would not be excluded from the elective share under section 732.2155(6)(c). Thus, to the extent the information sought by the surviving spouse is necessary to her determination whether the MCC stock value was enhanced during the marriage due to the efforts of the decedent, it is relevant.

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