Elective Share of Surviving Spouse

In many instances, spouses execute what is referred to as reciprocal wills. What this means is that each spouse designates the other as the entire beneficiary or the primary beneficiary of their estate under their wills. What happens, however, if a surviving spouse was not provided for under their deceased spouse’s will if they were married at the time the will was executed? In such instances, the elective share statute will come into play to determine how the estate is to be divided. This statute is codified by N.J.S.A. 3B:8-1.

In general, the elective share statute provides that the surviving spouse is entitled to one-third of the deceased spouse’s augmented estate provided the surviving spouse is not disqualified from taking. Naturally, two questions arise. First, what would potentially disqualify a surviving spouse from receiving his/her elective share? Typically, the disqualifying events with regard to a surviving spouse would be if the parties were in the process of a divorce or similar proceeding, or other disqualifying events codified by N.J.S.A. 3B:5-3, which include scenarios where the parties have entered into a property settlement agreement, the parties had separated and had ceased to cohabit, there had been a division of assets akin to equitable distribution by the parties, or the parties had entered into a marital settlement agreement.

Provided the surviving spouse is not disqualified from receiving an elective share of the Estate, then this spouse is entitled to one-third of the decedent’s augmented estate. The next question is naturally what constitutes the augmented estate. The definition of an “augmented estate” is provided by N.J.S.A. 3B:8-3 which states as follows:

The “augmented estate” means the estate reduced by funeral and administration expenses, and enforceable claims, to which is added the value of property transferred by the decedent at any time during marriage, or during a domestic partnership, to or for the benefit of any person other than the surviving spouse or domestic partner, to the extent that the decedent did not receive adequate and full consideration in money or money’s worth for the transfer, if the transfer is of any of the following types:

1. Any transfer made after May 28, 1980, under which the decedent retained at the time of his death the possession or enjoyment of, or right to income from, the property;
2. Any transfer made after May 28, 1980, to the extent that the decedent retained at the time of his death a power, either alone or in conjunction with any other person, to revoke or to consume, invade or dispose of the principal for his own benefit;
3. Any transfer made after May 28, 1980, whereby property is held at the time of decedent’s death by decedent and another with right of survivorship;
4. Any transfer made, after May 28, 1980, if made within 2 years of death of the decedent, to the extent that the aggregate transfers to any one donee in either of the years exceed $3,000.00.

As evidenced by this statute, the augmented estate definition seeks to claw back transfers made by the deceased spouse which would reduce his/her surviving spouse’s entitlement to a full share from the estate. Obviously, this calculation can be highly technical and may require extension research in order to identify these assets and transfers.

In light of the complexity of calculating the elective share of a surviving spouse who may be entitled to same it is highly suggested that competent counsel be retained. This attorney should be able to guide the surviving spouse through this complex process to ensure they are treated fairly, or the attorney might even have to file suit should the executor of the estate fail to comply.