A spouse of a person who died in New York has very important property rights in their estate:
- If the deceased spouse died without a will, the surviving spouse has the right to receive at least half of the estate. When a person dies without leaving a will, their surviving spouse has the right to an inheritance of $50,000 or 1/2 of the estate if the person who died had children, or the right to the entire inheritance if the person who died did not have children.[i]
- If the deceased spouse left the surviving spouse out of the will, the surviving spouse has the right to receive one-third of the estate. People leave their wives out of wills all the time, usually in favor of children from a prior marriage. In New York, a surviving spouse has the right to an inheritance even if they were cut out of the will. If the deceased spouse left a will excluding their spouse, a right to an “elective share” of the first $50,000 or 1/3 of an estate if the person who died had children, or the first $50,000 or ½ of the estate if the person who died did not have children. [iii]
- If the deceased spouse died without updating their will after getting married to the current spouse, the surviving spouse has the right to at least half of the estate. The surviving spouse would have a right to the same share of the inheritance that they would have received if the person who died did not have a will at all. In cases like this, the surviving spouse is called “the pretermitted spouse,” because the law presumes that the deceased spouse meant to include them in the will but forgot. The surviving spouse has a right to an inheritance of $50,000 or 1/2 of the estate if the person who died had children, and the right to the entire inheritance if the person who died did not have children.
- The right to an automatic “spousal set aside” for a total of up to $56,000.
The surviving spouse also has other important rights
- The right to be appointed as the estate’s Administrator if the deceased spouse died without a will. The surviving spouse has the preference in becoming the estate administrator, the person who is in charge and in control of the estate, if the spouse did not leave a will nominating such person. [ii]
- The right to file a proceeding challenging the will that leaves the surviving spouse out or diminishes their share.
“Loopholes” Claiming that there is No Money in the Estate
There are ways that people try to plan their estate in order to exclude their spouse and take money outside of the estate in an attempt to avoid the elective share. New York lawmakers are aware of those attempts, and have done their best to close those loopholes. [iv]
Property Transferred Within a Year of Death – Property transferred within a year of death is considered subject to the spousal rights of elective share. The defenders of the will are going to claim that the decedent does not own the property and it’s not a part of the estate and not subject to the estate rules, but the claim is not likely to work, as New York law has a “claw-back” provision whereby the surviving spouse can recapture the property gifted by the decedent and taken out of the estate within a year of his death. Such property is considered to be a part of the “augmented estate” for the purposes of calculating the amount of elective share due to the surviving spouse.
Property passing outside of probate – The other heirs may claim that some of the property of the person who died is not a part of their estate. While it is technically true that “testamentary substitute” property is not a part of the probate estate, it is nevertheless a part of the “augmented estate” and is therefore countable towards calculating the elective share that the surviving spouse is entitled to. This property includes joint bank accounts, assets transferred to trusts, pension plans insurance policies where the surviving spouse is not the beneficiary.
Claiming that the estate has no money to satisfy the elective share – Establishing the right to an elective share is only the first step of the problem. The hardest part of the elective share is not the elective share proceeding, but the accounting proceeding. The executor will try to use accounting tricks to claim that the estate does not have the money to pay for the elective share. They will try to “zero out” the estate. Legitimate expenses are taken into an account and deducted from the total amount of the estate used to calculate the size of the elective share. But unnecessary expenses, accounting tricks and money paid to the proponents of the estate are usually not allowed by New York Surrogate’s Court to be deducted from the amount of the estate for the purposes of calculating the elective share.
“Loopholes” Claiming that the Spouse is Disqualified
The next set of loopholes are grounds to override the right of election. Those factors are essentially loopholes that the proponents of a will use to defend against the surviving spouse’s exercise of a right of election.
Loophole 1: “there is a prenuptial agreement.” A valid prenuptial or postnuptial agreement invalidates a spouse’s rights to make a claim in an estate. However, this loophole itself is subject to loopholes, such as:
- one spouse did not have her own independent lawyer review the agreement
- one spouse was forced to sign it
- one spouse did not know what she was signing
- the prenuptial agreement is extremely unfair
- the prenuptial agreement wasn’t signed until the couple got married
- one spouse lied when disclosing their assets prior to the prenuptial agreement
Using those “loopholes on a loophole,” a surviving spouse may be able to set aside the prenuptial agreement and be able claim her spousal rights.
Loophole 2: “you abandoned the spouse” – abandonment [v] is a loophole that is sometimes used to try to invalidate the elective share claim. It often comes up when the deceased spouse and the surviving spouse were in the process of divorce but the deceased spouse died before the divorce could be completed. Needless to say, an incomplete divorce is not a divorce so the spouse is still entitled to an elective share unless the other heirs can successfully prove abandonment. Just proving that the couple did not get along is not enough, even if they no longer lived together at the time of the deceased spouse’s death.
Loophole 3: “the marriage was invalid” – if the marriage was invalid for whatever reason, there is no elective share. [vi] This elective share defense is commonly used to fight an elective share claim made by a much younger surviving spouse in an estate of an older deceased spouse. The argument is that the deceased spouse was too sick to give consent to enter into a marriage.
Loophole 4: “you killed your spouse.” Killing the spouse invalidates any rights to inherit from their estate. Not much of a loophole, as this is not a very common scenario. Nevertheless, it is easy to see this loophole’s potential to be applied in abuse and neglect cases.
Time Limits in Filing for an Elective Share
In order to qualify for a spousal right to an elective share, the electing spouse has to file a Notice of Election within six months of the appointment of the executor of the estate, and within two years of the death of the decedent. This is a strict statutory deadline. There are some situations where missing the deadline is excusable, but mostly it is not. There is no reason to miss this deadline; it’s a very simple paper to file. There are documents that come later that are more complicated, but this one is intentionally made easy so that people don’t put it off. Blowing the deadline to File a Notice of Election almost always means losing the right to file an elective share.
Property Not Counted in the Elective Share
Some property is not covered by the elective share:
- property acquired before marriage, unless it was comingled with marital property (for example, deposited in the same account as marital property)
- for example property that the decedent had before marriage, inherited property, etc.
The Right to the Spousal Set Aside
Up to $56,000 of estate property goes to the surviving spouse or children automatically, whether or not there’s a will, or if there’s a will that excluded the surviving spouse. [vii] This is broken down as follows:
- Up to $10,000 in household goods
- Up to $15,000 in farm property
- A car worth up to $15,000 (if the car is worth more, the spouse is entitled to take the car and reimburse the estate for the difference)
- Up to $15,000 in money or other personal property
- Up to $1,000 in mementos
Business of the Decedent
The decedent’s business is an important asset of the estate. If a business of the decedent is “taken over” by the children of the decedent, the surviving spouse should make no mistake about it and ask her New York estate lawyer to conduct a forensic valuation of the business and claim the business as part of the estate for the purpose of determining the surviving spouse’s share.
The Right to Challenge the Will
When a surviving spouse gets disinherited or their share is diminished, they often bring a proceeding to set aside the will based on one or more of the following allegations:
- someone unduly influenced the deceased spouse to disinherit the surviving spouse
- the deceased spouse was too sick to sign the will
- the will was not made correctly
- or the will was a forgery
In bringing the will contest, the surviving spouse accuses those who benefit from the will of interfering with the deceased spouse’s natural wishes to include his spouse in his estate plan.
Real Life Examples
Easiest case scenario – we file a Notice of Election, the executors of the estate don’t dispute and don’t try to find loopholes and just give the spouse the entire elective share (hasn’t happened yet in my practice, but hope springs eternal).
The Typical Scenario – Wife left out of a will in favor of children from the first marriage. Children try to use a loophole and claim that the spouse who died transferred property to children from their first marriage before their death, tell the wife that there is no money to in the estate to claim against. She contacts a New York estate lawyer (me), learns that any money gifted by the decedent within a year before his death are considered a part of the estate for the purposes of calculating the elective share, and the court accepts that argument (because it’s the law).
Abandonment example – wife claims an inheritance, the deceased husband’s sister claims that the wife abandoned the husband and moved to a different state. Her estate lawyer (me) defends by saying that the couple consensually moved to different states; there was no abandonment on the wife’s part.
“Zeroing out” the estate – executor, son of the decedent, claims that a multi-million dollar estate somehow owes money than it has. A contested accounting proceeding ensues, where we have a disagreement over the numbers.
New York elective share laws are complicated, and experience in the Surrogate’s Court practice is paramount when dealing with those claims. Call the Law Offices of Albert Goodwin at (212) 233-1233 and make an appointment to discuss spousal claims and rights to the estate.
[i] EPTL 4-1.1
[ii] EPTL 4-1.1
[iii] EPTL 5-1.1-A
[iv] EPTL 5-1.1-A
[v] EPTL 5-1.2
[vi] EPTL 5-1.2
[vii] EPTL 5-3.1