According to the Code of Alabama, a surviving spouse has a right to something called an elective share. An elective share is the portion of the deceased’s estate that the surviving spouse maintains a right to claim. An elective share is presented as an alternative to the provisions for the spouse existing in the will. Even if the will is legitimate and legally sound, the surviving spouse may still exercise his or her right to claim the elective share.

So how exactly is the amount of the elective share determined? There are two methods used to calculate the value of the elective share. Whichever method results in the lesser value is the one used to determine the value of the elective share. The first method used to determine the elective share consists of subtracting the value of the surviving spouse’s separate estate from the estate of the deceased spouse. The surviving spouse is entitled to the remaining value of the deceased’s spouse estate.

The second formula for determining the amount of the elective share involves simply figuring one-third of the deceased’s estate. If this amount is less than the value from the first method, the surviving spouse is entitled to claim one-third of his or her late spouse’s estate. It is important to remember that even if a will leaves the surviving spouse less than the value of the elective share, the elective share takes precedence over the language in the will. Also, according to the Administrative code, “the elective share is available only after the debts of the estate are paid”.

The surviving spouse may also retain the right to waive his or her claim to the elective share. This is when problems can arise regarding Medicaid eligibility. Elective share rights may only be waived by signing a written contract, agreement, or waiver after the individual waiving his or her rights has received a fair disclosure of their existence. Individuals who have questions about their rights concerning elective share are advised to consult with an attorney who deals with elder law issues.

When it comes to Medicaid eligibility, waiving one’s right to claim the elective share can have some highly detrimental and unintended consequences. Medicaid counts a waiver of rights to the elective share as a transfer of resources, or a gift. Conversely, Medicaid also counts the value of the elective share as resources available to the surviving spouse. Therefore, a Medicaid applicant who has either waived his or her right to the elective share or who has failed to understand that the value of the elective share will be counted as an additional asset might be shocked to receive either a hefty transfer penalty notice from the Medicaid agency or a denial due to excess resources. Essentially, if rights to the elective share are waived a transfer penalty will be assessed. If rights to the elective share are not waived the value of the elective share will be counted as additional resources. Seniors need to be aware of the effect their actions concerning elective share can have on their future Medicaid applications.

In one case that our eligibility consultants worked with, elderly Mr. Robinson (name changed) signed a waiver of his rights to the elective share after his wife’s death. Mr. Robinson, who did not fully grasp the consequences of his choice to sign the document, simply reacted like most recently widowed spouses would. He wanted the wishes of his late wife to be followed according to her last will and testament. Mr. Robinson viewed the option to claim his elective share as an abandonment of his wife’s wishes. He signed an agreement that waived his rights to the elective share. One year later, when Mr. Robinson required professional care from a nursing home and applied for Medicaid benefits, his decision regarding the elective share came back to haunt him. A four and half month transfer penalty was handed down by the Medicaid office, meaning that Mr. Robinson would be ineligible for Medicaid benefits for nearly five months. This time period was based off of the value of the elective share that to which Mr. Robinson waived his right. The penalty period could be shorter or much longer depending on the value of the particular elective share.

Elective share is an especially complex concept that can have far-reaching effects on an individual’s application for Medicaid benefits. It is important to be aware of the facts about elective share, particularly in regards to Medicaid eligibility, when the time comes to discuss options with an attorney. The death of a loved one is a distressing occurrence in itself. By planning ahead and seeking information about matters such as elective share, seniors and their family members can be prepared to make rational decisions during what is often a difficult experience for everyone.

This column is one in a series of articles concerning Mediciad eligbility issues. Marlan Golden is an intern with Healthcare Compensation Solutions. Contributing author Thera Herring is a Medicaid Eligibility Consultant with Healthcare Compensation Solutions. The employees of HCS are not attorneys. The information contained in this article is presented as a public service. The information is provided for educational purposes only and should not be misconstrued as legal advice. Readers who have additional questions concerning the interpretation or application of the law are encouraged to seek experienced legal counsel. HCS is a private consulting firm that specializes in all areas of Alabama Medicaid Reimbursement and is comprised of a team of  retired eligibility employees who bring over a century of combined years of experience in Medicaid eligibility, Social Security, VA, and DHR. Please feel free to send in a personal experience regarding Medicaid issues to: HCS, Attn: Senior Solutions, P.O. Box 240515, Montgomery, AL, 36124.