Q: If I die before my spouse is he entitled to my 401K?

A: Absent a pre- or postnuptial agreement that provides otherwise, a spouse has the right to reject whatever they are receiving under the deceased spouse’s will and elect their statutory share. The old law used to be a straight 1/3 to 1/2 (depending on whether there are minor children involved) of the assets passing through the probate estate, which did not include assets passing by way of beneficiary designations, like 401Ks, and jointly titled assets held with others.

However, effective October 1, 2020, Maryland’s new “Augmented Estate” Law enables a surviving spouse, upon the death of his/her deceased spouse, to receive a greater share of the deceased spouse’s assets by applying the elective share to both assets that pass through probate and assets that do not pass through probate. The elective share now reaches assets that do not pass though probate, such as Transfer on Death (TOD) accounts, accounts jointly titled with others; some trusts; and assets with beneficiary designations, including 401K accounts and life insurance policies. However, the assets subject to the elective share are also reduced by the deceased spouse’s share of assets passing outside of probate to the surviving spouse through TOD, beneficiary designations and jointly titled property. So the formula has become more complicated.

These surviving spouse’s rights in an estate are very different from the calculation of what constitutes “marital property” in a divorce, where pre-marital assets and inheritances of one spouse can be excluded from the property distribution and remain the sole property of the spouse in whose name such assets are held.

If you want to control the distribution of your estate unaffected by your spouse’s legal rights, then the best way to do so at this point is with a postnuptial agreement.