There are many aspects in life that can have an impact on a person’s estate. An individual’s marriage is certainly one of the most important and dramatic factors regarding estate rights.
If a decedent was married, a surviving spouse is given many estate rights and privileges. As discussed in numerous posts in the New York Probate Lawyer Blog, a spouse is considered a primary distributee or next of kin. As such, a spouse has a right to act as the Administrator of the estate where the decedent dies intestate (without a Will). A spouse also has the right to receive a minimum amount of a decedent’s estate and cannot be totally disinherited. A spousal right of election is provided by New York Estates, Powers and Trusts Law (EPTL) Section 5-1.1A. Generally speaking, the right of election is the greater of $50,000.00 or one-third of a decedent’s net estate. EPTL Section 5-3.1 also gives a spouse a right to certain basic personal assets of the decedent such as household furniture and a motor vehicle having a value of up to $25,000.00. EPTL 4-1.1 sets forth a spouse’s share of an intestate estate.
The Federal and New York State Estate Tax Laws also have provisions that are favorable to a spouse. The tax laws allow an unlimited marital deduction by which spouses can transfer an unlimited amount of assets between themselves without incurring gift or estate taxes.
Due to the rights and monetary benefits afforded to a spouse in a decedent’s estate it is not unusual to find Estate Litigation regarding a spouse’s interest in an estate. Estate disputes can involve issues as to whether a valid marriage between the decedent and the spouse ever occurred or whether the parties were divorced. EPTL 5-1.2 provides, among other things, that a valid divorce will disqualify a person from invoking spousal rights. Another area of controversy involves pre-nuptial or anti-nuptial agreements whereby a spouse may have agreed to waive or limit spousal rights of inheritance. These agreements can be the source of Estate Contests as to the interpretation of the language in the agreement or whether the agreement is void due to coercion or other factors.
In New York State, like many other states, the divorce laws are based upon concepts such as equitable distribution whereby married couples assets are divided in a so-called equitable manner based upon many factors such as contributions during the marriage, the determination of separate property and long-term valuations of marital assets such as professional licenses and business interests. Equitable distribution may, in fact, provide a spouse with greater monetary benefits than the one-third or one-half interests that are applied by the estate laws after a spouse dies. In a number of instances courts have been confronted with cases where a spouse dies during the divorce process and have been asked to decide whether the estate laws or divorce equitable distribution laws apply to divide the deceased spouse’s assets. Generally, a death will abate or stop the divorce case and, therefore, the estate laws take over. However, the courts have recognized that where a divorce case has essentially been decided, even though the final judgment is not issued, the Courts will allow the equitable distribution laws to apply. In the recent case of AC v DR decided by New York Justice Stacy D. Bennett on August 29, 2013 and reported in the New York Law Journal on September 10, 2013, these very issues were presented for review. In AC the Court had granted a divorce to a husband and had concluded hearing the testimony as to equitable distribution but had not made a final decision as to the financial distribution. When the husband committed suicide the husband’s estate sought to dismiss the divorce case as having been abated by the death. Not only did the court find that the divorce action did not abate since the action was essentially completed, it also found that the husband would not be allowed in equity to defeat the wife’s equitable distribution claims by deliberately causing his own death.
Estate Settlement and Estate Administration often involve the resolution of many issues including the status of a decedent’s next of kin which includes a surviving spouse. I have represented many clients in estate mattes where kinship and spousal issues are important in determining the manner in which estate assets are to be distributed.