Disinherited by Your Spouse? As a Widow or Widower, You May Have Rights Under the New Jersey’s Elective Share Law

A Guide to What Disinherited Spouses Should Know about New Jersey’s Elective Share Law

Losing a spouse is incredibly difficult, and discovering you've been disinherited or left out of their will can add immense emotional and financial distress to an already painful time. But in New Jersey, there's a vital legal protection designed to prevent this: the elective share. If you're a surviving spouse or domestic partner wondering what your options are, this guide in an FAQ for you.

What is an Elective Share in New Jersey?

The elective share is a legal right that prevents a surviving spouse or domestic partner from being disinherited by their deceased spouse. In New Jersey, if your married or domestic partner spouse dies domiciled in the state on or after May 28, 1980, you generally have a right to elect to take one-third of their augmented estate. This means that even if your spouse's will or trust leaves you nothing, or less than this amount, you can claim your one-third share.

Why Does the Elective Share Exist in New Jersey?

The primary purpose of the elective share statute in New Jersey is to protect the assets that rightfully belong to spouses and domestic partners within a decedent's estate. It acts as a "safety net" to ensure a fair inheritance and provide for the continued support of the surviving partner, regardless of how the deceased allocated assets in their will or trust. It safeguards against a spouse trying to "wrongly transfer" property or simply cutting their partner out.

Who is Eligible to Claim an Elective Share in New Jersey?

To be eligible for an elective share in New Jersey, generally, the following conditions must be met:

• The deceased spouse or domestic partner must have died domiciled in New Jersey on or after May 28, 1980.

• At the time of death, the decedent and the surviving spouse or domestic partner must not have been living separate and apart in different habitations.

• They must also not have ceased to cohabit as man and wife as a result of a judgment of divorce from bed and board, or under circumstances that would have given rise to a cause of action for divorce or nullity of marriage to the decedent prior to their death under New Jersey laws. This means divorced or legally separated spouses generally cannot elect a share.

• Unlike the Uniform Probate Code (UPC), the New Jersey elective share law grants this share only to the extent the spouse satisfies a "test of need." This is a crucial distinction. The court must deduct the value of the surviving spouse’s independently acquired or inherited assets from the elective share. If the value of the surviving spouse's property is more than one-third of the augmented estate, the surviving spouse gets nothing by election. As a result, a surviving spouse with substantial independent wealth may not receive anything from the estate under the elective share.

• The right to take an elective share must be exercised by the surviving spouse or domestic partner during their lifetime. If the surviving spouse is an incapacitated person, their guardian may exercise this right only with a court order, based on a finding that the election is necessary to provide adequate support during their probable life expectancy.

What is the "Augmented Estate" and How is it Calculated?

The elective share is one-third of the "augmented estate". This isn't just the assets listed in a will; it's a broader calculation designed to prevent disinheritance through other means. The "augmented estate" starts with the decedent's estate reduced by funeral and administration expenses, and enforceable claims. To this, the value of certain property is added back and other property is deducted.

Property that is added back include:

• Property transferred by the decedent at any time during marriage or domestic partnership to someone other than the surviving spouse/domestic partner, if the decedent did not receive adequate and full consideration for the transfer. This specifically includes transfers made after May 28, 1980, such as:

  
  

  • Any transfer where the decedent retained possession, enjoyment, or right to income from the property at the time of their death.

  • Any transfer where the decedent retained a power to revoke, consume, invade, or dispose of the principal for their own benefit.

  • Any transfer where property was held at the time of death by the decedent and another with a right of survivorship.

  • Any transfer made within two years of the decedent's death where the aggregate transfers to any one recipient exceeded $3,000 in either of those years.

• The value of property owned by the surviving spouse or domestic partner at the time of or as a result of the decedent's death, to the extent it was derived from the decedent by means other than testate (will) or intestate (no will) succession without full consideration. This includes interests in inter vivos trusts created by the decedent, proceeds of life insurance on the decedent's life, annuity payments, pensions, and retirement plan payments to the surviving spouse, and the value of community property rights.

• The value of property transferred by the surviving spouse or domestic partner at any time during marriage or domestic partnership without full consideration, which would have been includable in their own augmented estate if they had predeceased the decedent.

Certain items are then deducted from these inclusions to arrive at the "augmented estate." They include:

• Funeral and administration expenses, and enforceable claims.

• Transfers made with the written consent or joinder of the surviving spouse or domestic partner.

• Life insurance, accident insurance, joint annuity, or pension payable to a person other than the surviving spouse or domestic partner. While some assets with beneficiary designations (like life insurance or retirement accounts) are generally considered part of the augmented estate, if these specific types of assets are payable to someone other than the surviving spouse, they are deducted from the augmented estate calculation.

• Income earned by included property prior to the decedent's death is not treated as property derived from the decedent.

What if I Previously Waived My Right to an Elective Share?

It is possible to waive the right to an elective share. A waiver made after May 28, 1980, must be in writing and signed by the spouse or domestic partner. This can be a separate document, This can be a separate document, or part of a prenuptial, postnuptial, or other agreement.

For such a waiver to be valid, it must generally be made after "fair disclosure" of all assets owned individually and jointly, and the waiver itself should recite this disclosure and state the consideration for the waiver. The consideration could be mutual reliance on each other's estate plans. In the context of Medicaid eligibility, waiving an elective share is considered a "transfer of assets" issue.

How Does Claiming an Elective Share Affect Other Beneficiaries?

When a surviving spouse or domestic partner successfully claims an elective share, it means they take their share against the will. Consequently, other beneficiaries named in the will or trust may receive less in proportion to the surviving spouse's take. Additionally, if the decedent transferred undervalued property to others during their lifetime, those recipients might be required to return or contribute the value needed to properly augment the estate.

Is Calculating and Claiming an Elective Share Complex?

While the concept of a one-third share of the augmented estate might seem straightforward, the process and calculation can be quite complex. It often requires intricate real estate and financial knowledge to investigate the decedent's estate, properly value assets, and perform the necessary deductions and additions.

By When Must an Elective Share Be Claimed in New Jersey?

An elective share claim must generally be filed within six months after the court appoints a personal representative for the estate. This timeframe can be extended for good cause, but the request for extension must be made within the initial six-month period. Due to these complexities, consulting an experienced estate planning or probate attorney is highly recommended to ensure accuracy and validity.

What if I Am Receiving Medicaid Benefits or May Need to Apply?

If you are a Medicaid recipient or applicant, there is an obligation to pursue claims under New Jersey's Spousal Elective Share Statute. Waiving your right to an inheritance, including an elective share, can be seen as a "transfer of assets" by Medicaid, potentially impacting your eligibility.

What Should I Do if I Think I've Been Disinherited or Left With Less Than My Share?

If you suspect you've been disinherited or left with less than your entitled share, it is crucial to seek legal assistance promptly. An experienced estate planning and probate attorney can help you:

• Investigate the decedent's estate to evaluate a potential elective share claim.

• Navigate the complex calculations of the "augmented estate".

• File the necessary legal paperwork in Superior Court within the strict time limits.

• Ensure you receive what is legally yours, protecting your financial support and preventing costly mistakes in probate proceedings.

Don't shortchange yourself during this difficult time. Understanding and asserting your elective share rights can provide the financial security you deserve.