EPTL 5-3.1: The Family Exemption — Property Set Aside Before the Estate Is Distributed

When a New York resident dies, not everything they owned becomes part of their estate. New York Estates, Powers and Trusts Law (EPTL) § 5-3.1 carves out specific categories of property — up to $92,500 in total value — that pass immediately to the surviving spouse or, if there is no spouse, to the decedent's children under the age of twenty-one. This is known as the family exemption or "exempt property" set-off. Because this property is not an estate asset at all, it is not controlled by the will, it does not pass under the intestacy rules, and with one narrow exception it is not available to the decedent's creditors.

The purpose of the statute is practical: it ensures that a surviving spouse or minor children are not left without a car, household furnishings, and a basic cash cushion while the estate winds through Surrogate's Court administration, which can take months or years.

What EPTL 5-3.1 Actually Exempts

EPTL 5-3.1(a) lists five categories of property, each with its own dollar cap. The values below reflect the amounts set by the 2010 amendments, which apply to the estates of decedents dying on or after their effective date:

Three important refinements in the statutory text:

• No cash substitution for items (1) through (3). If the decedent did not own the furniture, books, animals, or farm equipment described, the spouse does not receive money in their place. Those exemptions apply only to property actually in existence at death.
• The motor vehicle is different. Under EPTL 5-3.1(a)(4), the surviving spouse may elect to take cash of up to $25,000 in lieu of the vehicle — useful where the spouse does not drive or the estate would rather sell the car.
• Funeral expenses come first out of the cash exemption. The $25,000 money exemption under (a)(5) is subject to a carve-out: if the other estate assets are insufficient to pay reasonable funeral expenses, the fiduciary must apply the exempt money to the funeral bill first, and only the balance passes to the spouse or children.

How Exempt Property Interacts with the Will, Intestacy, and the Elective Share

Exempt property vests in the surviving spouse (or qualifying children) by operation of law at the moment of death. This has several consequences:

• The will cannot take it away. Even if the will leaves everything to someone else, the spouse still receives the 5-3.1 set-off.
• It is in addition to the intestate share. If the decedent died without a will, the spouse receives exempt property first, and the EPTL 4-1.1 intestate distribution is computed on what remains.
• It is in addition to the elective share. Exempt property is excluded from the net estate when calculating the spousal right of election under EPTL 5-1.1-A. A disinherited spouse can claim both.
• Creditors generally cannot reach it. Apart from the funeral-expense priority described above, exempt property is shielded from estate creditors. In an insolvent estate, this is often the only property the family keeps.

Worked Example

Suppose a decedent dies leaving a spouse, a will disinheriting her, and the following personal property: household furnishings appraised at $14,000, a car worth $18,000, and $60,000 in a bank account in his sole name. The estate owes $9,000 in funeral expenses and $75,000 to credit card creditors.

1. The spouse receives the furnishings ($14,000, under the $20,000 cap) and the car ($18,000, under the $25,000 cap) outright.
2. From the $60,000 account, $25,000 is exempt money under (a)(5). Because $35,000 remains in the estate — enough to pay the $9,000 funeral bill — the spouse takes the full $25,000.
3. Only the remaining $35,000 is an estate asset, from which funeral expenses, administration expenses, and creditors are paid in the order fixed by SCPA 1811. The credit card creditors take a loss; they have no claim against the $57,000 in exempt property.
4. The spouse may then separately assert her elective share under EPTL 5-1.1-A against whatever net estate remains.

Who Qualifies — and Who Is Disqualified

The set-off runs first to the surviving spouse. If there is no surviving spouse, it runs to the decedent's children under twenty-one years of age, collectively. If there is neither, EPTL 5-3.1 simply does not apply and all property is administered as part of the estate.

A spouse who is disqualified under EPTL 5-1.2 — for example, by a final divorce, an abandonment of the decedent, or a failure to support — loses the exemption along with other spousal rights. Note that a divorce also automatically revokes testamentary dispositions to the former spouse under EPTL 5-1.4, so a former spouse generally takes nothing under either the will or the family exemption.

Procedure in Surrogate's Court

In practice, the exemption is administered as follows:

1. Set-off by the fiduciary. The executor or administrator identifies the exempt items and money, values them as of the date of death, and turns them over to the spouse (or the guardian of minor children). The set-off should be reflected in the estate inventory and later in the fiduciary's accounting, showing the property as excluded from estate assets.
2. Small estates. Exempt property is not counted toward the $50,000 ceiling for voluntary administration under SCPA Article 13. An estate holding $130,000 in personal property may still qualify as a small estate if $92,500 of it is exempt under EPTL 5-3.1 — a significant cost-saving point that is frequently missed.
3. Compelling a reluctant fiduciary. If the executor refuses to turn over exempt property — a common scenario where the executor is a child from a prior marriage who is hostile to the surviving spouse — the spouse may petition the Surrogate's Court under SCPA 2102 for an order directing delivery. Where a third party holds the property, a discovery proceeding under SCPA 2103 may be appropriate.
4. Valuation disputes. If the parties disagree about whether a vehicle or furnishings exceed the statutory caps, the court resolves the issue on appraisal evidence, valuing the property as of the date of death.

Common Pitfalls

• Distributing before setting off. A fiduciary who pays creditors or beneficiaries out of funds that should have been set aside for the spouse faces personal surcharge liability at the accounting.
• Assuming jointly held or beneficiary-designated assets count. The exemption applies to property the decedent owned that would otherwise be an estate asset. Joint accounts and payable-on-death assets pass outside the estate on their own terms.
• Confusing exempt property with a bequest. Because exempt property is not a testamentary disposition, the spouse does not need to worry that accepting it waives other rights, and it is not affected by will contests. It also need not be renounced under the procedures of EPTL 2-1.11 unless the spouse affirmatively wishes to decline it in writing.
• Forgetting the funeral-expense priority. In thin estates, the $25,000 cash exemption shrinks dollar-for-dollar to cover reasonable funeral costs before anything passes to the family.
• Waiting too long. There is no fixed statute of limitations for claiming the set-off, but once the estate is fully distributed and the fiduciary discharged, recovering exempt property becomes far more difficult. The claim should be asserted in writing early in the administration.

Albert Goodwin is a New York estate attorney who represents surviving spouses asserting their rights under EPTL 5-3.1 and fiduciaries administering estates in which the exemption must be correctly applied.

You can contact us by phone at 212-233-1233 or by email at [email protected].