The surviving spouse or domestic partner of a New Jersey decedent has a right of election to take a one-third share of the predeceased spouse’s or partner’s “augmented estate,” unless the parties were living separate and apart or ceased to cohabit as man and wife at the time of death.
The augmented estate is defined as the estate, reduced by funeral and administration expenses and enforceable claims, plus the value of certain gratuitous transfers to persons other than the surviving spouse or domestic partner. Also included in the augmented estate is 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 that it is derived from the decedent by means other than testate or intestate succession, without full consideration. This latter category includes inter vivos trusts created by the decedent, along with life insurance, pensions and annuities.
Not included in the augmented estate is property transferred with the written joinder or consent of the surviving spouse or domestic partner, nor is life insurance, joint annuities or pensions payable to persons other than the surviving spouse or domestic partner.
The right of election may be exercised only during the lifetime of the electing party and suit must be commenced within 6 months after the appointment of a personal representative of the predeceased spouse’s estate. The Elective Share may be waived by a written agreement signed by the waiving party “after full disclosure.”
The Elective Share is needs-based; that is, if the value of the assets owned by the surviving spouse or domestic partner in his or her own right exceeds one-third of the augmented estate, the Elective Share will be valued at zero.
The original transferees or appointees of property from the decedent and their donees are subject to contribution to the extent that they have the property or its proceeds. This would seem to permit the gratuitous transfer of assets by the donees in order to avoid imposition of the contribution rule, as where the donee in turn gifts the property to a third party.
When fixing the value of a life estate or an interest in a trust for Elective Share purposes, one-half the value of the property subject to the life estate or trust is used. For a discussion of the interplay between this provision and New Jersey’s Medicaid regulations, see our article entitled “Medicaid Estate Recovery and the DeMartino case.”
The full text of the statute can be found at N.J.S. 3B:8-1 et. seq.