INHERITANCE RIGHTS OF SPOUSES
EPTL 4-1.1, 5-1.1A, 5-3.1, DRL 236 B(5)(d)(4)
By J. Douglas Barics
One statutory factor used in determining the division of marital assets is the loss of pension and inheritance rights. See D.R.L. 236-B (5)(d)(4). While the loss of pension rights has been mitigated by the Court of Appeals case of Majauskas v. Majauskas, the loss of inheritance rights is rarely used by the court. Nevertheless it remains a common question asked by those involved in a divorce, and may play a factor in some cases, especially for longer marriages involving significant assets. The following is a list of the rights spouses have in each other's estates.
I. Spousal Rights Under an Administration Proceeding
When a person dies without a will, the laws of intestate succession govern. In essence, New York law provides a default will for every person, and it is governed by EPTL 4-1.1. This type of matter is called an Administration Proceeding.
A spouse has two rights under the laws of intestate succession. A spouse is first in line to manage the estate as the administrator. Should the spouse be unable or unwilling, the EPTL provides a list of successive administrators. The spouse may have to post a bond, although this requirement may be waived on consent of all people entitled to share in the estate. It is very common for a will to waive this requirement as well, but absent such a directive, the bond remains the default requirement.
Regardless of who is appointed as administrator, EPTL 4-1.1 provides that if a spouse dies without children, the surviving spouse receives the entire estate. When there are children, regardless of how many, the spouse receives the first $50,000 of the estate, and one-half of the rest, with the children receiving the other half.
The amount actually received by the surviving spouse and children will be reduced by expenses, debts and taxes paid by the estate. Expenses will be allocated in a pro-rata amount based on the share of the estate.
Upon a judgment of divorce, a spouse forfeits any right they may have under the laws of intestate succession, both to receive a share of the estate and to act as administrator.
II. Spouse's Right of Election
A Spouse's Right of Election makes it impossible to disinherit a spouse in New York. Under EPTL 5-1.1-A, which applies to decedents dying after September 1, 1992, a spouse has the right to override the terms of a will, and receive the the greater of $50,000 or one-third of the estate under probate outright (as opposed to receiving it in trust) regardless of what the will provides for the spouse. This is known as the elective share. When the will leaves more than the elective share of the estate to the surviving spouse, he or she would not exercise the right of election. The right of election is valuable only if the will leaves less than the elective share of the deceased person's estate to the surviving spouse. For example, if a person dies leaving a will giving everything to his children, the surviving spouse has the right to receive the elective share (i.e., the greater of $50,000 or one-third of the estate) despite what the will provides.
A right of election will also protect a surviving spouse's right to inherit even if the deceased spouse attempts to give away his or her estate, or if testamentary substitutes are used to dispose of the estate. For example, if the deceased spouse had jointly held bank accounts or property with someone other than the spouse, held money in trust for someone other than a spouse, or certain retirement accounts of which the surviving spouse is not the beneficiary, or most other property rights where a non spouse takes to the detriment of a surviving spouse, the right of election will trump these rights.
The right of election must be asserted by the surviving spouse within six months from the date a will is probated or if there is no will, when an administrator is appointed. In addition, the right of election cannot be asserted more than two years after the date of death.
A judgment of divorce terminates the right of election by the surviving spouse. If the divorce was issued by New York, it cannot be challenged by someone claiming to be a surviving spouse because the right to challenge a New York divorce ends with the death of the former spouse. For an out of state divorce, including an ex parte divorce which is normally void, it will depend on who obtained the divorce. If the surviving spouse obtained the divorce, he or she will not be able to assert a right of election. If the decedent obtained a non New York divorce, the surviving spouse may collaterally attack the divorce.
III. Exempt Property
A little known but important property right for families of a deceased spouse is known as exempt property, and is found in EPTL 5-3.1. Exempt property is property which passes automatically to a spouse or children under the age of 21, regardless of the laws of intestate succession or the terms of a will. Up to $56,000 worth of property may be exempt. However, the exempt property is broken down into five categories, each with a maximum dollar amount. If the full dollar amount for one category is not used, or if a particular item is not in existence, there is no carryover or credit and the exempt dollar amount is lost.
1. Up to $10,000 in exempt property may be claimed for:
- All housekeeping utensils
- musical instruments
- sewing machine
- household furniture and appliances, including computers and electronic devices used in and about the house
- clothing of the deceased person
2. Up to $1,000 in exempt property may be claimed for:
- The family bible
- family pictures
- video tapes
- computer tapes, discs and software used by the family
3. Up to $15,000 in exempt property may be claimed for:
- Domestic animals
- farm machinery
- one tractor
- one lawn tractor
4. Up to $15,000 in exempt property may be claimed for:
5. Up to $15,000 in exempt property may be claimed for:
- Money or other personal property
IV. The Right to Act as Executor & the Right to Receive a Share of the Estate Under the Will
Unless the will of the deceased person expressly provides otherwise, a divorce revokes any provision of the will giving the divorced spouse a share of the estate or appointing the divorced spouse executor of the deceased person's estate
V. The Right to Share in the Recovery of a Money Judgment for Financial Loss Resulting from Wrongful Death
A spouse is entitled to seek compensation for the wrongful death of a spouse. Once divorced, the former spouse is no longer entitled to a share of that award.
The article "Inheritance Rights of Spouses" is provided as a free educational service by J. Douglas Barics, attorney at law, and does not constitute legal advice. Legal advice may only come from a qualified attorney who is familiar with the facts and circumstances of a specific case.
If you have any questions or comments, please feel free to contact Mr. Barics at firstname.lastname@example.org or (631) 864-2600. For more articles and information, please visit www.jdbar.com.
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J. Douglas Barics, Esq. – Divorce, family, matrimonial lawyer in Long Island, New York.