The Right of Election
There is a misconception that a Last Will and Testament is the final determination of how estate assets are to be distributed. However, if you are the surviving spouse or a domestic partner of the decedent, you may have another option, a “right of election.”
In New Jersey, pursuant to N.J.S.A. 3B:8-1, a surviving spouse or domestic partner is entitled to one-third (1/3) of the “augmented estate.” This means that as a surviving spouse or domestic partner, if you are not satisfied with what was left to you in your spouse’s Last Will and Testament, or if your spouse did not leave you anything, you may instead be able to claim an elective share, which is one-third (1/3) of decedent’s “augmented estate.” An “augmented estate” is the value of decedent’s estate reduced by funeral and administration expenses and enforceable claims, and increased by property transferred by decedent during the time of marriage or domestic partnership for the benefit of another person other than the surviving spouse or domestic partner, for which the decedent did not receive adequate compensation. The “augmented estate” does not include certain non-probate assets of a decedent such as “any life insurance, accident insurance, joint annuity or pension payable to a person other than the surviving spouse or domestic partner.”
It is important to understand, however, that there are limitations on who may be entitled to the right of election. In New Jersey, the elective share is allowed, but only if at the time of decedent’s death you, as a surviving spouse or domestic partner did, not have a judgment of divorce or were living separate and apart under circumstances which have given rise for an action of divorce or nullity of marriage. N.J.S.A. 3B:8-1.
Moreover, case law states that the surviving spouse or domestic partner is not entitled to an elective share if the value of independent property belonging to the surviving spouse or domestic partner exceeds the value of the “augmented estate.” Matter of Estate of Del Guercio, 206 N.J.Super. 159, 501 A.2d 1072 (Law Div.1985).
The surviving spouse or domestic partner may waive his or her right to an elective share by “a written contract, agreement or waiver, signed by the party waiving after fair disclosure.” N.J.S.A. 3B:8-10.
Should a surviving spouse or domestic partner be interested in pursuing his or her right to an elective share against a deceased spouse’s estate, he or she has six (6) months after a personal representative is appointed for the estate to file a Verified Complaint and Order to Show Cause with the Superior Court of New Jersey. N.J.S.A. 3B:8-12.
In New York, pursuant to E.P.T.L. §5-5.1-A, the surviving spouse has an option to receive an elective share, which is the greater of $50,000 or one-third (1/3) of the “net estate.” If the estate is less than $50,000, the elective share is the value of the “net estate.” In calculating the “net estate,” debts, administration expenses and reasonable funeral expenses are deducted, while estate taxes are not.
Furthermore, in New York, the net elective share is “reduced by the capital value of any interest which passes absolutely from the decedent to such spouse, or which would have passed absolutely from the decedent to such spouse but was renounced by the spouse.” E.P.T.L. §5-5.1-A(a)(4). This consists of all property passing under the decedent’s Will, all property qualifying as a testamentary substitute and all property of decedent passing to distributees under the laws of intestacy as codified by E.P.T.L. §4-1.1. E.P.T.L. §5-5.1-A(a)(3).
A spouse in New York may “waive or release a right of election,” but such waiver or release must be in writing, signed and “acknowledged or proved in the manner required by the laws of [New York] for the recording of a conveyance of real property.” E.P.T.L. §5-5.1-A(e).
Similar to New Jersey, a surviving spouse interested in pursuing the elective share in New York must make the election within six (6) months from the appointment of an executor or administrator of the estate.
There are many more intricacies when it comes to the elective share in both New Jersey and New York. Pashman Stein Walder Hayden, P.C. is ready, willing and able to advise you of your options and to help you decide whether or not to pursue your right to an “elective share.” If you have further questions about New Jersey’s or New York’s right of election law, please do not hesitate to contact us.