Spousal elective share

Imagine your spouse dies and you discover that not only were not provided for in the will, but that their previous will specifically barred you from inheriting anything at all. What would you do?

This is what happened to Mary K. Ward. Mary was the fourth wife of Stephen Day Ward, Jr., who had an irrevocable will from an estate plan created with his third wife, Nancy. While Stephen’s will explicitly barred future spouses from inheriting anything, South Carolina statute provides for spouses left out of the will. This led to an interesting conflict: which should prevail, public policy or a valid contract?

The matter, In RE: Estate of Stephen Day Ward, Jr., went before the South Carolina Court of Appeals in 2024 (read it here), and we go into it below.

It’s a good look at how South Carolina courts view public policy and at the powers and limitations of irrevocable wills. It’s especially important if you have or have considered getting an irrevocable will.

Should You Get an Irrevocable Will? Pros and Cons

Irrevocable wills are wills that cannot be changed or amended once signed. The only exception is divorce, which typically only blocks the ex-spouse from acting as executor and inheriting anything; the rest of the will stands. (The laws regarding this vary by state; check in your state.)

Some people, often married couples, choose irrevocable wills because they cannot be changed. They want their estate plan to be carried out as originally agreed, even if one spouse predeceases the other by many years. The surviving spouse is bound by the terms of the will(s) they created together and cannot change the terms for any reason.

Advantages of an irrevocable will over a traditional revocable will:

• Guarantee the estate plan will be carried out, even after death
• Protect assets from being passed down to the surviving spouse’s new partners, spouses, or stepchildren, or other potential heirs
• Prevent the surviving spouse from being pressured into changing terms of will

We do not draft irrevocable wills here at our law firm – neither irrevocable joint wills (one document for two or more people) nor mutual wills (separate documents for each individual).

Why not? Because things change. Life circumstances, family dynamics, personal finances, and state and federal law affecting estate planning can change drastically, but an irrevocable will can lock you into decisions you made long ago when life was very different. Further, other tools can be used to accomplish many of the same goals. We’ll go into some of those options down below.

Finally, there are no guarantees, even with an irrevocable will. Which leads us to the Ward case.

The Irrevocable Wills and Estate Plan of Stephen and Nancy

In 2013, Stephen Ward married for the fourth time, to a woman named Mary. They did not create an estate plan together during their marriage, and Stephen did not take any action with regards to the will he executed during his third marriage to wife Nancy.

Stephen died in 2016. Under the terms of his will, Mary was barred from inheriting anything.

Mary then sought, through her daughter, to be declared an omitted spouse. As an omitted spouse, she would be entitled to the share of Stephen’s probate estate that she would have received had there been no will at all, which is 50% under South Carolina’s intestacy laws.

Stephen’s children (the Appellants), acting as his co-personal representatives, disagreed that Mary should receive an inheritance. That’s because Stephen and Nancy had executed an estate plan together in 2005 which barred any future spouse from inheriting anything.

The Terms of the Estate Plan with Third Wife Nancy

The estate plan, which included Stephen’s irrevocable last will and testament (the Will) and an agreement for mutual wills and trusts (the Agreement), worked with interlocking provisions to ensure their wishes were carried out in this manner:

• After one spouse died, his or her assets would “pour over” into a trust controlled by the other
• After the death of the other spouse, the remaining assets would be dispersed among Stephen’s and Nancy’s children

These terms are quite common among couples. The Agreement contained the following terms regarding re-marriage, too:

4.2 If he or she remarries after the death of the
Predecessor, he or she will:

4.2.1 Thereafter ratify his or her Will and
Trust in the form and with the provisions
contained in his or her Will and Trust
annexed hereto; and

4.2.2 As a condition of such re-marriage,
require any person he or she re-marries to
legally and unconditionally waive his or her
right to an Elective Share in the Property
provided to them under S.C. Code Ann.
Section 62-2-201

Stephen did not carry out the terms of the Agreement after his marriage to Mary to ratify the will or to have Mary waive her right to elective share.

The matter was heard in probate court and circuit court before eventually going before the Court of Appeals of South Carolina.

The Four-Part Test for Omitted Spouses

Did Mary qualify as an “omitted spouse”? To settle the matter, the court looked to a four-part test it previously established in Green v. Cottrell (2001), which essentially turns the relevant statute (SC Code Section 62-2-301) into a checklist:

“A surviving spouse who wishes to qualify as an ‘omitted spouse’ must demonstrate:

1. The decedent spouse executed the will in question prior to the marriage;
2. The will does not provide for her as the surviving spouse;
3. The omission was unintentional; and [sic]
4. The decedent did not provide for the spouse with transfers outside the will.”

The first two points: undisputedly true.

Point #3: “Hotly disputed.” The court states that had Stephen executed the documents required by section 4.2 of the Agreement – namely, ratifying the Will and Trust and having Mary sign a waiver of elective share – the Appellants would be in a better position to argue that the omission of Mary from the Will was intentional. Since he didn’t, the court agrees with the probate court that the omission was not intentional.

(It’s worth noting that witnesses at the earlier trial testified Stephen said he still intended for his estate to be handled as described in the Will, and that getting married would not change that. However, the “Dead man’s” statute, SC Code Section 19-11-20, generally prohibits witnesses from providing testimony about conversations with the deceased if they would stand to benefit from it.)

Point #4: Also “hotly disputed.” Brian Ward, one of Stephen’s children, testified in probate court that Mary had received several things during the marriage and after Stephen’s death, including a leased Toyota Camry, a timeshare in Las Vegas, the $17,000 capital percentage from a local club membership, and approximately $13,000 in total. The Appellants argued that these assets were a transfer outside of the will. The court disagreed, saying the value does not approach what Mary would otherwise have been entitled to from an estate valued in excess of $900,000.

The court found that Mary was an omitted spouse under this test.

When a Valid Agreement and Public Policy Clash

“South Carolina treats with great deference a testator’s intent in disposing of his or her property,” says the SC Court of Appeals. Yet it also acknowledges that sometimes a testator’s intent may conflict with public policy.

In this case, there’s no dispute that the Will and the Agreement, which would bar Mary from inheriting anything, were valid. This directly clashes with South Carolina’s protections for surviving spouses from being unknowingly disinherited (read more about elective share) or from being omitted entirely (read more about omitted spouse), which is considered a matter of public policy.

Ultimately, the appeals court AFFIRMED the circuit court and the probate court, which had said that allowing “blanket” provisions to overcome an individual’s statutory rights to the omitted spouse’s share violated public policy.

Alternatives to Irrevocable Wills for Asset Protection

As stated above, we do not use irrevocable wills here at our firm. We use other estate planning tools to accomplish the same goals.

• Life estate deeds allow a surviving spouse to live in the home but ensure the home is passed to a different heir upon the spouse’s death
• Irrevocable trusts remove assets from probate estate altogether
• Testamentary trusts created by the will upon the death of the testator
• QTIP trusts provide income to surviving spouse while reserving assets for children
• Prenuptial or postnuptial agreements to waive elective share

These are just some of the options available. Speak with an estate planning attorney in your state about the right options to achieve your goals.

Personalized Estate Planning

Does your current estate plan reflect your family’s wishes? Are you as protected as you could be? For help creating, amending, or reviewing your estate plan, call Gem McDowell today. He and his team at the Gem McDowell Law Group help individuals and families in South Carolina create comprehensive, customized estate plans that help protect assets, preserve good family relationships, and provide peace of mind. Schedule your free consultation today by calling (843) 284-1021. We have offices in Myrtle Beach and Mt. Pleasant, SC, and are looking forward to speaking with you.