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Under Estates, Powers & Trusts Law (EPTL) § 5-1.1-A, a surviving spouse has a right to elect against the Will of a predeceasing spouse. The elective share is one-third of the net estate. The net estate consists of the net probate assets as well as testamentary substitutes. [EPTL § 4-1.1 provides that if the decedent dies intestate and is survived by a spouse and issue, the spouse takes $50,000 plus one-half of the residue; if there are no surviving issue, the spouse takes the entire estate.]
Testamentary substitutes include those assets over which the decedent may have parted with legal title prior to his death, but are brought back into the estate solely for purposes of calculating the surviving spouse’s right of election. Testamentary substitutes include (i) gifts causa mortis [gifts that become revocable if the donor survives the contemplated event (e.g., voyage, operation, etc.)]; (ii) joint bank accounts; (iii) jointly owned property; (iv) pension plans; (v) date-of-death value of lifetime trusts over which the decedent retained the right to possession or enjoyment of the property; (vi) any property over which the decedent had a presently exercisable power of appointment; and (vii) any property transferred by the decedent for inadequate consideration, except $10,000 annual exclusion gifts.
When EPTL § 5-1.1 was revised in 1992, life insurance was not a included as a testamentary substitute. Former Nassau Surrogate Raymond Radigan recalls that the insurance industry was “absolutely opposed to having insurance included as a testamentary substitute.” (NYLJ, 3/31/03) As a result of this omission, one may validly reduce his net estate for the purpose of defeating his spouse’s right of election by purchasing life insurance.
In second marriage situations, a waiver of the right of election is often included in the prenuptial agreement. The spouse or soon-to-be spouse can waive her right of election by a signed, acknowledged writing. Such a waiver need not be supported by consideration. However, any person a seeking a waiver after marriage would be well advised to have his spouse represented by counsel prior to executing the waiver, since a waiver may be withdrawn if it was obtained by fraud, concealment or overreaching. See Matter of Sunshine, 369 N.Y.S.2d 304.
[Note that only a spouse can waive an interest in certain ERISA pension rights. Therefore, any waiver of these federally mandated rights would have to occur after marriage. The prenuptial agreement could contain a provision requiring the execution of documents necessary to effectuate this waiver. Note also that a separation agreement waiving rights in the other’s property that makes no mention of death of the parties is not a waiver of the right of election. See Matter of Curran, 80 N.Y.S.2d 421 (4th Dept. 1948).]
A surviving spouse may also be disqualified from exercising a right of election. Under EPTL § 5-1.2, a surviving spouse is disqualified if (i) a final decree of divorce or separation was entered; (ii) the surviving spouse procured a divorce not recognized in New York; or (iii) the surviving spouse abandoned the decedent, and the abandonment continued until the decedent’s death.
“Abandonment” means an unjustified departure without the consent of the other spouse. Matter of Riefberg, 58 N.Y.2d 134 (1983). It may be difficult to establish. Merely leaving the marital abode is not enough; it involves a “hardening of resolve” that culminates in a decision to sever the conjugal relationship. Matter of Baldo, 620 N.Y.S.2d 602 (3rd Dept. 1994). Even reprehensible behavior, such as cruelty or adultery, does not disqualify the surviving spouse.
Divorced spouses have few rights against their former spouse’s estate. Under EPTL § 5-1.4, not only may a divorced spouse named her former spouse’s Will not exercise the right of election, but she also no right to inherit any property or to act as a named Executor or Trustee under the Will. For purposes of effectuating the dispositive provisions of the Will, the former spouse is treated as though she immediately predeceased the testator. One logical exception to this rule exists: A former spouse may inherit or act as fiduciary if the Will expressly provides that the testator desires to override the statutory rule.
There can be no right of election if there is no Will. Still, one seeking to minimize the rights of the surviving spouse is not better off without a Will. The surviving spouse of a decedent who dies intestate is entitled to entire estate if no issue survive, and to $50,000 plus half the estate if issue survive. Compare these with the the right of election, which is one-third of the net estate, regardless of whether issue survive. Thus, a Will should be executed and entrusted to someone who can be depended upon (e.g., attorney or friend) to propound the Will to probate.
An agreement before marriage waiving the right of election is preferable, since some consideration flows from the non-waiving party’s agreement to marry. A spouse waiving the right of election after marriage should be represented by counsel, since consideration may be an issue. Divorce also cuts off the right of election, but only if decree of divorce has been awarded. Although abandonment also cuts off the right of election, abandonment may be difficult to establish. If no waiver is feasible, the purchase of insurance will reduce the size of one’s “net estate” against which the right of election operates. Executing a Will and ensuring that it will be propounded is essential.