CHAPTER 240
FORMERLY
SENATE BILL NO. 267
AN ACT TO AMEND CHAPTER 9, TITLE 12 OF THE DELAWARE CODE RELATING TO THE ELECTIVE SHARE STATUTE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section I. Amend §901(a) of Chapter 9, Title 12, Delaware Code, by inserting the words "an amount equal to" in the first sentence thereof preceding the words one third of the elective estate". In addition by adding two additional sentences at the end of said Section to read as follow:
"The elective share may be satisfied in cash or in kind, or partly in each. Assets distributed in satisfaction of the elective share shall be valued at date of distribution."
Section 2. Amend §902 of Chapter 9, Title 12, Delaware Code by striking said Section in its entirety and substituting in lieu thereof the following:
"§902. Elective Estate Defined.
(a) The elective estate means the amount of the decedent's gross estate for federal estate tax purposes, regardless of whether or not a federal estate tax return is filed for the decedent, modified as follows:
(I) less those deductions allowable under §§2053 and 2054 of the Internal Revenue Code of 1986, as amended, or the comparable provisions of any later law ('the Code'), and
(ii) without regard to the provisions of §2040(b) of the Code relating to qualified joint interests from which is subtracted the sum of all transfers made by the decedent during his lifetime which are included for purposes of determining his federal adjusted gross estate and which were made with the written consent or joinder of the surviving spouse.
(b) In every case where an elective share petition has been filed, the personal representative of an estate shall prepare a Form 706 (United States Estate Tax Return) for the estate regardless of whether such form is required to be filed. A copy of such form shall be provided to the surviving spouse by the latest of the following dates:
(I) the due date for the Form 706 as extended,
(ii) if no Form 706 is due, the due date for Form 600 (Delaware Inheritance Tax Return) as extended for reasons other than pending litigation; or
(iii) three (3) months after the elective share petition has been timely filed."
Section 3. Amend §903 of Chapter 9, Title 12, Delaware Code by striking it In its entirety and substituting in lieu thereof the following:
"§903. Transfers to Surviving Spouse by Decedent.
The value of the property transferred to the surviving spouse by the decedent for purposes of subsection (a) of §901 of this Title is an amount which equals the value of the property derived from the decedent by virtue of his death. For purposes of this Section:
(a) Property derived from the decedent by virtue of his death shall be: Property which is part of the decedent's estate which passes to the surviving spouse by testate or intestate succession and which has not been disclaimed or renounced, provided that an income interest which has been disclaimed or renounced will not be deemed to have been disclaimed or renounced for purposes of computing the value of the property transferred to the disclaimant under this Chapter; any property transferred to the surviving spouse by the decedent during his lifetime and includeable in the decedent's gross estate under §2036 of the Code; any property jointly owned with the decedent to the extent the surviving spouse did not contribute to the value of the property; any beneficial interest of the surviving spouse In a trust created by the decedent during his lifetime or under his Will; any property appointed to the spouse by the decedent's exercise of a general or special power of appointment; any proceeds of insurance (including accidental death benefits) on the life of the decedent attributable to premiums paid by him; any lump sum immediately payable and the commuted value of the proceeds of annuity contracts under which the decedent was the primary annuitant attributable to premiums paid by him; the commuted value of amounts payable after the decedent's death under any public or private pension, disability compensation, death benefit or retirement plan, exclusive of the federal Social Security system, by reason of service performed or disabilities incurred by the decedent; and the value of the share of the surviving spouse resulting from rights in community property in this or any other state formerly owned by the decedent. For purposes of this subsection (a), the decedent shall be deemed to have paid all life insurance and annuity premiums with respect to all insurance proceeds on the decedent's life payable to his surviving spouse and all lump sum, annuity, or other payments received by his surviving spouse by reason of surviving the decedent under any annuity contract except to the extent that the surviving spouse can show that he paid such premiums from his own funds which were not given to him by the decedent.
(b) Property owned by the spouse at the decedent's death is valued as of the date it is valued for purposes of computing the elective estate. Income earned by Included property prior to the decedent's death is not treated as property derived from the decedent."
Section 4. Amend §904 of Chapter 9, Title 12, Delaware Code by deleting the period, ", at the end of the first sentence of said Section and adding the following:
provided the personal representative of his estate shall succeed to his rights under a right of election exercised by him."
Section 5. Amend §905 of Chapter 9, Title 12, Delaware Code by striking the last three words at the end of the first sentence of said Section.
Section 6. Amend subsection (d). of §906 of Chapter 9, Title 12, Delaware Code by striking said subsection in its entirety and substituting in lieu thereof the following:
1906. Proceeding for Elective Share;. Time Limit.
(d) After notice and hearing, the Court of Chancery shall determine the amount of the elective share and shall enter a judgment and order apportioning the liability for the amount of the elective share among the recipients of the contributing estate and directing payment of such liability as provided in §908(a). If it appears that a fund or property Included in the elective estate has not come into the possession of the personal representative, or has been distributed by the personal representative, the court nevertheless shall fix the liability of any person who has any interest in the property or who has possession thereof, whether as trustee or otherwise."
Further amend said §906 by adding the following new subsections (f) and (g):
"(f) The Court of Chancery on petition of a surviving spouse may restrain any person from making a payment or transfer of property which constitutes part of the contributing estate, either before or after a petition for an elective share Is filed.
(g) No transferee of, or holder of a lien against, real property comprising part of the contributing estate shall be liable to a surviving spouse if the transferee or lienholder has given bona fide consideration to the recipient of such real property from the decedent unless a certified copy of the judgment, order, or decree of the Court of Chancery providing to the contrary with respect to such real property has been recorded In the office for the recording of deeds in the county where the real property is located prior to the recordation of the deed, mortgage, or other instrument transferring, or creating the lien against, such real property. The recording of any such judgment, order, or decree shall be indexed in the grantor's index under the names of the decedent and the recipient of such real property from the decedent."
Section 7. Amend §907 of Chapter 9, Title 12, Delaware Code by striking it in its entirety and substituting in lieu thereof the following:
TOT. Effect of Election on Benefits Derived from Decedent.
(a) The surviving spouse's election of his elective share does not affect the share of the surviving spouse under any provisions made for the surviving spouse under the decedent's will, any trust established by the decedent, or the intestate succession laws unless the surviving spouse also expressly renounces in the petition for an elective share the benefit of all or any of the provisions. If any provision is so renounced, the property or other benefit which would otherwise have passed to the surviving spouse thereunder is treated, subject to contribution under subsection (a) of §908 of this Title, as if the surviving spouse had predeceased the decedent for all purposes except the value of an income interest renounced by the surviving spouse shall nonetheless be deemed to be property transferred to the surviving spouse by the decedent for purposes of §903(a) and §901(a).
(b) A surviving spouse is entitled to the surviving spouse's allowance whether or not he elects to take an elective share."
Section 8. Amend §908 of Chapter 9, Title 12, Delaware Code by striking it in its entirety substituting in lieu thereof the following:
1908. Liability for Elective Share.
(a) The liability for the amount of the elective share shall be apportioned among the recipients of the decedent's contributing estate' (as defined in subsection (b)). Such apportionment shall be made in the proportion, as near as may be, that the value of the property of each such recipient bears to the total value of the property received by all such recipients interested in the contributing estate, provided that in any case where a person is given an interest in income or an estate for years, or for life, or other temporary interest in any property, the liability for the elective share on both such temporary interest and on the remainder thereafter shall not be apportioned between or among the recipients of such interest but shall be charged in rem against and paid out of the corpus of such property without apportionment between remainders and temporary estates. Until it is paid or satisfied the surviving spouse's elective share shall be a proportionate charge against the properties constituting the decedent's contributing estate based upon the values of all such property for purposes of determining the elective estate. No person or property shall be liable for contribution in any greater amount than he or such property would have been if relief had been secured against all persons and property subject to contribution.
(b) For purposes of this Section, the decedent's contributing estate consists of only that portion of the elective estate of which the decedent was the sole owner at his death and which was not transferred or deemed transferred to his surviving spouse by the decedent as described in §903(a). The decedent's contributing estate does not include any jointly owned property with the right of survivorship of which he was a joint owner, any insurance proceeds which are payable to a beneficiary other than to his estate, or any property held in trust.
(c) A recipient of property comprising part of the contributing estate may pay his proportionate elective share liability with respect to such property or may choose to give up such property thereby relieving his personal liability. If a recipient elects to give up such property he shall be entitled to any value realized upon the sale or other disposition of such property in excess of his proportionate elective share liability."
Section 9. This Act shall become effective for estates of decedents dying on or after January 1, 1990.
Approved June 20, 1990.