Take Time to Grieve
The loss of a spouse or parent is often an overwhelming and extremely difficult event. The most important thing to remember is that there is plenty of time to deal with the financial and legal aspects of administering a person’s estate. Rarely is there a reason to rush into action following the death of a loved one. Take some time to grieve, talk to other family and friends about the loss, and prepare for the funeral or memorial service.
Fear and Uncertainty
Even with strong support of family and friends it is easy to become overwhelmed and afraid because there are so many questions and so much uncertainty. Will I be okay? Is there enough money for my support and the support of dependents? My spouse always took care of the money, what should I do now? Is a probate needed? What if my spouse passed away with heavy medical debts? Will other people or heirs try to take all of the property? What are my rights?
Protecting the Surviving Spouse
Alaska law provides many protections for a surviving spouse. First, the surviving spouse generally has priority to serve as the Personal Representative of the decedent’s estate, unless the decedent’s will says otherwise. Second, in many cases, the surviving spouse will take control of bank and investment accounts that are jointly titled with the deceased spouse without going to the probate court. Third, the surviving spouse is often named as the primary beneficiary on life insurance, annuities and retirement accounts. Such property will also pass directly to the surviving spouse outside of the probate process. Fourth, Alaska law gives the surviving spouse priority over all other heirs and creditors of the first $55,000 of the probate estate as statutory allowances described below. Fifth, life insurance and retirement accounts are exempt from creditor claims. Finally, the surviving spouse has a statutory right to an elective share of the estate.
Is a probate needed?
The first question that needs to be answered is whether or not a probate will be needed. If all property was owned jointly with the surviving spouse or passed through beneficiary designation to the surviving spouse, then a probate probably will not be needed. However, if there is real estate solely in the name of the decedent, cash or other property solely in the name of the decedent valued in excess of $50,000, or motor vehicles solely in the name of the decedent valued in excess of $100,000, then a probate may be necessary.
If a probate is necessary, it will be opened by the Personal Representative of the estate. The Personal Representative will be the person nominated in the decedent’s Last Will and Testament. If the decedent did not leave a will, then the surviving spouse automatically has priority to serve as Personal Representative.
Is the spouse responsible for the debts of the decedent?
The second question is whether the debts of the decedent have to be paid. This is a more complicated issue and may require the assistance of a lawyer.
If the surviving spouse is a “co-debtor” on a credit card, mortgage, loan, unpaid utilities, income tax liability, or other indebtedness, the surviving spouse generally cannot avoid paying off the debt. But if the decedent is the only person responsible for the debt, the surviving spouse may not have to pay off the debt.
If the surviving spouse is not jointly liable for the decedent’s debts, a creditor can only satisfy the debt from probate estate assets. Any property passing outside of probate (jointly titled property or property passing by beneficiary designation) is not subject to the claims of the decedent’s creditors. Moreover, under Alaska law, any life insurance proceeds or retirement accounts that wind up in the probate estate are not subject to the claims of creditors. In addition, a surviving spouse is entitled to certain statutory allowances and exemptions which are paid to him or her before any creditors are paid. These allowances and exemptions include a homestead allowance ($27,000), a personal property exemption ($10,000), and a family allowance ($18,000 unless otherwise increased by the court). These allowances are paid to the surviving spouse in addition to any property passing outside of probate to the surviving spouse by joint title or beneficiary designation.
If the probate estate is solvent and has assets exceeding the debts, then debts will have to be paid, but usually not right away. If the decedent’s debts exceed the probate estate assets (insolvent), then the debts are paid according to a special priority scheme set out in the statutes. A surviving spouse should consult with a lawyer about the priority payment of debts if he or she is unsure about whether to pay creditors.
Can children or step-children claim money from the probate estate?
Whether or not children or step-children are entitled to receive anything from the estate is a complicated question that may require legal assistance. If there is a valid will that gives everything to the surviving spouse, that is the end of the matter, children and step-children do not have any rights to the estate.
If the will purports to give everything to children or step-children or if large amounts of the decedent’s property pass to children and step-children by beneficiary designation, the surviving spouse has a statutory right of election to claim one-third of the augmented estate. This is called the elective share. The augmented estate is comprised of all property of the decedent at the time of death including property in decedent’s name alone, all jointly titled property, and property subject to beneficiary designation such as life insurance and retirement accounts. The surviving spouse has the right to make a claim for one-third of all property of decedent, regardless of the terms of the decedent’s will, beneficiary designations or joint titling.
If the decedent died intestate (without a will), Alaska law provides that the surviving spouse is entitled to the entire probate estate, so long as any children of the decedent were also the children of the surviving spouse. If the decedent had surviving parents or children who were not the children of the surviving spouse, (i.e., the surviving spouse’s stepchildren) the probate estate will be shared with others according to a statutory scheme. Generally that scheme says that the surviving spouse is entitled to the $55,000 statutory allowances plus an additional share that depends upon the relationships of the surviving next of kin as follows:
1. If a parent survives the decedent, and the decedent had no children, the surviving spouse receives the first $200,000 of the estate
plus three-quarters of the balance of the probate estate.
2. If all the decedent’s surviving descendants are also the descendants of the surviving spouse and the surviving spouse has one or
more surviving descendants who are not the descendants of the decedent, the surviving spouse receives the first $150,000, plus
one-half of the balance of the probate estate. The other one-half of the balance of the probate estate passes to the children of the
decedent.
3. If one or more of the decedent’s surviving descendants are not descendants of the surviving spouse, the surviving spouse will
receive the first $100,000, plus one-half of the balance if the probate estate. The other one-half of the balance of the estate passes
to the decedent’s descendants who were not the descendants of the surviving spouse.
Should you hire a lawyer?
It is likely that if you are a surviving spouse you have many questions that are not addressed by this website. We highly recommend that you consult with a qualified attorney to answer questions, assure that your rights are protected and to assist in making the process go as smoothly as possible. A qualified attorney is well worth the price of completing the probate process in an efficient and timely manner so that you can begin to move forward again with your life.
You may find more information related to these topics at the following areas of our site: