Under New York law, a decedent is prohibited from disinheriting his or her surviving spouse (see Margaret Valentine Turano, Practice Commentaries: EPTL § 5-1.1-A [1999 ed.]). Consistent with that prohibition, the laws of this state provide that a decedent’s surviving spouse has a personal right of election to take a portion of the decedent’s estate, whether or not the decedent provides for the spouse in his or her last will and testament (see EPTL § 5-1.1-A). Predictably, the right of election has given rise to extensive litigation, as evidenced by Suffolk County Surrogate John M. Czygier, Jr.’s recent decision in Matter of Newman (see Matter of Newman, 883 P 2007/A, NYLJ 1202520804987 [Sur Ct, Suffolk County Nov. 1, 2011]). As discussed below, Newman is noteworthy because it addresses the extent to which a judicial determination that the alleged surviving spouse’s marriage to the decedent was unlawful will affect the spouse’s right to elect against the decedent’s estate.
EPTL § 5-1.1-A provides that the surviving spouse of a decedent who dies on or after September 1, 1992, has a personal right to elect against the decedent’s estate (see EPTL § 5-1.1-A), unless it is established that the marriage upon which the surviving spouse relies was incestuous, bigamous, or a prohibited remarriage under the Domestic Relations Law (see Newman, supra). The financial consequences of a surviving spouse asserting elective share rights can be substantial, as the pecuniary value of the elective share is equal to “the greater of (i) fifty thousand dollars or, if the capital value of the [decedent’s] net estate is less than fifty thousand dollars, such capital value, or (ii) one third of the net estate” (see EPTL § 5-1.1-A).
In Newman, the decedent’s alleged surviving spouse, Kenneth Newman (“Kenneth”), sought to exercise his elective share rights against the decedent’s estate (see Newman, supra). After the decedent’s will was admitted to probate, the fiduciary of her estate commenced a proceeding to determine the validity of Kenneth’s election against the estate (see id.). Kenneth died before the matter was resolved, and the executor of the decedent’s estate ultimately moved for summary judgment concerning Kenneth’s notice of election (see id.).
Surrogate Czygier held that Kenneth’s notice of election was invalid, as his marriage to the decedent was unlawful (see id.). In reaching that conclusion, the Surrogate found that, at the time he allegedly married the decedent, Kenneth had not yet divorced (and, thus, was still married to) his first wife (see id.). Absent evidence that Kenneth and the decedent “remarried” after Kenneth divorced his first wife, the executor of the decedent’s estate presented sufficient evidence to rebut the presumption that Kenneth’s “second marriage [was] valid and that the prior marriage was dissolved by death, divorce, or annulment” (see id.). Accordingly, as Kenneth’s marriage to the decedent was unlawful, his notice of election was void and unenforceable (see id.).
In sum, while a surviving spouse generally has a right to elect against a decedent’s estate, that right is not absolute (see Matter of Berk, 71 AD3d 883 [2d Dep’t 2010]). To the extent that the surviving spouse’s marriage to the decedent is unlawful, the survivor will not receive his or her elective share.
Over the past several months, the Appellate courts have been actively engaged in determining issues pertinent to the field of trusts and estates and providing guidance to the Surrogate’s Court practitioner. The following is a synopsis of but a few of the decisions rendered.
In Matter of Delgatto, 2011 NY Slip Op 02667, the Appellate Division, Second Department affirmed an order of the Surrogate’s Court, Kings County (Johnson, S.), which denied the petitioner’s motion for summary judgment in a proceeding pursuant to SCPA 2103 to recover real property. The petitioner, who was the administrator cta of the estate, alleged that the decedent transferred the subject property to a revocable trust for the benefit of his caregiver, as a result of undue influence. The Court noted that several of the exhibits submitted by the petitioner were not in admissible form, i.e. unsigned and unattested transcripts, and thus could not be utilized in support of the motion. Further, the Court opined that the admissible evidence submitted by the petitioner failed to establish the petitioner’s prima facie entitlement to judgment as a matter of law.
The Elective Share
On April 26, 2011, the Appellate Division, Second Department, affirmed the order of the Surrogate’s Court, Kings County (Johnson, S.), which granted the petitioner’s motion for summary judgment determining her right to an elective share of the decedent’s estate. In Matter of Atiram, 2011 NY Slip Op 03593, the Court found that the petitioner had established that she married the decedent in 1952 and that they remained legally married until the date of the decedent’s death. The Court concluded that the objectant had failed to raise any triable issue of fact as to whether the petitioner was disqualified on the grounds of abandonment, or equitably estopped from taking an elective share.
In Matter of Faggen, 2011 NY Slip Op 01413, the Appellate Division, First Department affirmed an order of the Surrogate’s Court, New York Count (Webber, S.), which dismissed a petition for a compulsory accounting by the co-fiduciaries of the estate of the decedent. The record revealed that the decedent was the fiduciary of the estate of her late husband, who was the executor of the estate which was the subject of the proceeding. The Court held that a compulsory proceeding by fiduciaries thrice removed from the subject estate was not authorized by the provisions of SCPA 2207.
Proceeding Against a Fiduciary to Recover Property
Before the Appellate Division, Third Department in Matter of Curtis, 2011 NY Slip Op 027773, was an appeal from an order and decree of the Surrogate’s Court, Rensselaer County (Hummel, S.), which partially granted the petitioner’s application to compel the delivery of property from the fiduciary, and from a decree of that court which judicially settled the fiduciary’s accounting. The parties were the decedent’s daughters and co-executors of her estate. Prior to the decedent’s death, the decedent moved in with one of her daughters, who became her attorney-in-fact. Acting in this capacity, the daughter transferred assets of the decedent into her name.
After the decedent’s death, the decedent’s other daughter compelled her sister to account as attorney-in-fact and as co-executor of the estate. Both accountings were submitted and objections were filed. At the bench trial, the petitioner only pursued objections to the respondent’s accounting as attorney-in-fact, alleging that the transfers of assets by the decedent were the result of self -dealing and breach of fiduciary duty. The Surrogate’s Court disagreed, concluding that the respondent’s actions were undertaken with the express consent of the decedent, who was found competent at the time. The Appellate Division affirmed.
The Court held that while there was a presumption that the services provided by respondent’s husband in connection with the sale of certain realty were gratuitous in nature, that presumption was sufficiently rebutted by the testimony of the respondent and her husband that the decedent agreed to pay for her son-in-law's services. To this extent, the Court deferred to the Surrogate’s assessment of the witnesses’ credibility, and expressly noted that the petitioner put forth no evidence to contradict the evidence presented.
Moreover, the Court found that the transfer of the decedent’s investment account to the respondent, and respondent’s inclusion as a mortgagee upon the sale of the decedent’s home constituted valid gifts, albeit made by the respondent as the decedent’s attorney-in-fact. The Court relied on the language of the power of attorney which authorized the making of the gifts in issue, as well as the testimony of the respondent who stated that the decedent was present when the subject transactions occurred.
This month, the Second Department has issued two important decisions on entitlement to an elective share when a marriage occurred while the decedent lacked the requisite mental capacity to enter into a marital contract. Matter of Berk and Campbell v Thomas were both cases in which a caregiver secretly married the incapacitated individual for whom she worked, in an effort to manipulate a testamentary scheme for her own financial gain. Although the statutory limitations on disqualification from the right of election did not infringe upon the “surviving spouses’” rights to inherit from their respective “husbands” (see EPTL §5-1.2), the Appellate Division followed equitable principles in determining the parties’ respective rights.
In Matter of Berk, 20 Misc 3d 691 (Sur Ct, Kings County 2008), summary judgment was granted to the “surviving spouse” on the issue of her entitlement to an elective share, despite the suspicious circumstances surrounding her marriage to the decedent. A discussion of the lower court’s decision can be found in a prior entry. To briefly recap, the decedent’s “spouse” had been the decedent’s live-in caretaker since 1997. By the time the two secretly married in 2005, he had become completely dependent upon her. In fact, the marriage occurred almost exactly one year prior to his death, when he was 99 years old (she was 47), was suffering from dementia, and had been deemed by a physician to be incapable of entering into binding contracts or managing his social affairs. The lower court dismissed these facts as irrelevant for purposes of determining entitlement to the right of election. Rather, it limited its inquiry to (1) whether the petitioner was the decedent’s surviving spouse upon his death, i.e., whether the marriage was void under the circumstances; and (2) whether any of the disqualifying factors of EPTL §5-1.2 had been met. Because the petitioner demonstrated that she was the surviving spouse at the time of the decedent’s death, as the marriage was potentially voidable but not void according to DRL §7, the Surrogate held that she was entitled to judgment as a matter of law. Indeed, the result of the determination that the marriage was voidable, not void, foreclosed inquiry into the validity of the marriage because no steps were taken to void the marriage during the decedent’s lifetime. But under the circumstances, where the marriage in issue had been kept a secret by the petitioner while the decedent was alive, no such steps could possibly have been taken.
In overturning the Surrogate’s decision, the Second Department recognized the existence of “a triable issue of fact as to whether the petitioner had forfeited the statutory right of election” on equitable grounds. In particular, relying on Campell v Thomas (2010 NY Slip Op 02082 [2d Dept 2010]), the Court stated that the estate had presented evidence that could prove the petitioner was aware of the decedent’s incapacity and inability to consent to marriage, and deliberately took “unfair advantage . . . by marrying that person for the purpose of obtaining pecuniary benefits that becomes available by virtue of being that person’s spouse, at the expense of that person’s intended beneficiaries" (Matter of Berk, 2010 NY Slip Op 02139 [2d Dept 2010]). Thus, the order was modified, denying the petitioner’s motion for summary judgment, and reinstating counterclaims.
In sum, while the lower court’s holding was based upon statutory authority, equity was the cause for its reversal. The Appellate Division explained its rationale for this determination in further detail in its simultaneous decision in the very similar case of Campbell v Thomas.
In Campbell, the decedent was suffering from severe dementia and terminal cancer when he and his short-term caregiver, Nidia, who stayed with the decedent while his daughter went on vacation, were married. Immediately thereafter, while the decedent’s daughter was still away, Nidia transferred the decedent’s Citibank account from the decedent’s name to the couple jointly, and named herself the sole beneficiary of his retirement account.Continue Reading...
A recent decision emanating from the Kings County Surrogate’s Court provides another interesting application of the rules on entitlement to an elective share. In Matter of Atiram, 2009 NY Slip Op 52356(U), the petitioner sought a determination as to her right of election under EPTL 5-1.1A. She had married the decedent in 1952, but thirty-eight years later, the couple participated in a Jewish religious divorce under the supervision of the Rabbinical Alliance of America in New York. The Ministry of Religion of the State of Israel allegedly recognizes this type of divorce. New York, however, does not.
Pursuant to EPTL 5-1.2, a divorce disqualifies an individual from obtaining an elective share when “a final decree or judgment of divorce . . . recognized as valid under the laws of this state [that] was in effect when the deceased spouse died.” New York does not recognize a rabbinical divorce as a valid termination of a marriage because the laws of this state require divorce by “due judicial proceedings.” In light of this rule, the objectant in Atiram sought a stay of the petitioner’s application pending an Israeli court’s determination of the validity of the divorce by the laws of that jurisdiction which, she argued, would qualify as the requisite “judicial proceeding” for New York. The Court disagreed, and opined that the outcome of the Israeli proceeding was irrelevant to the petitioner’s right of election.
Last year, we posted an entry on Matter of Berk, 20 Misc 3d 691 (Sur Ct, Kings County 2008), a decision in which the court granted an elective share to a surviving spouse notwithstanding evidence that the marriage to the decedent, who was 99 years old at the time, occurred under highly questionable circumstances. The court’s rationale was that the marriage was voidable, not void. The Surrogate held that because the marriage was not invalidated prior to the decedent’s death, the right of election could not be disturbed.
In Matter of Kaminester, 2009 NY Slip Op 29429 (Sur Ct, New York County), the court addressed a similar set of facts, but with one distinguishing factor: prior to his death, the decedent had been adjudicated incapacitated in an Article 81 proceeding. This fact allowed for an entirely different result than that reached in Berk.
In Kaminester, the decedent’s estate sought a determination as to the validity of the elective share pursuant to SCPA §1421. As in Berk, the marriage remained a secret until the decedent’s death, and occurred mere months prior thereto. But in this case, the marriage also occurred two and a half months after a Texas court appointed a temporary guardian for the decedent, and during the pendency of an Article 81 proceeding in New York. Within the context of the Article 81, a temporary restraining order had been imposed with respect to removing the decedent from the State, among other things. The Article 81 proceeding resulted in the appointment of a temporary guardian, and a stipulation on the record that the decedent lacked capacity to marry. The decedent’s new “wife” was in the courtroom with her attorney at the time of the stipulation, but neither one revealed the existence of the couple’s recent marriage.
Notably, during this time period, the beneficiary designation on the decedent’s life insurance policy, worth over $1 million, was changed to favor his new “wife.” In addition, a deed was executed transferring the decedent’s Westhampton property to the couple as joint tenants with right of survivorship.
The “wife” filed a notice of election within weeks of the decedent’s death. Thereafter, the executor of his estate sought an order from the Article 81 court to hold her in contempt for violating its TRO. In response, the court invoked Section 81.29(d) of the Mental Hygiene Law, and “revoked and voided” the marriage, the designation of the “wife” as beneficiary on the decedent’s life insurance, and the deed that transferred to her a joint tenancy interest in his Westhampton property. The First Department affirmed these portions of the Article 81 court’s decision, accepting the posthumous voidance of the decedent’s marriage.
Surrogate Glen of New York County subsequently addressed the issue of the elective share, and thus the validity of the marriage, in light of these events. She discussed Section 7 of the Domestic Relations Law (“DRL”), the statute that had been relied upon in Berk, and compared it to Section 81.29(d) of the Mental Hygiene Law (“MHL”). DRL §7 provides that a marriage involving an individual “incapable of consenting to a marriage for want of understanding” is voidable, and becomes a nullity as of the date it is annulled. In contrast, Section 81.29(d) of the MHL “permits the court that appoints an article 81 guardian for an incapacitated person to “’revoke any previously executed . . . contract. . . . made by the incapacitated person prior to the appointment of the guardian if the court finds that the previously executed . . . contract. . . was made by the person was incapacitated’” (Matter of Kaminester, 2009 NY Slip Op 29429 at *5). Thus, the Article 81 adjudication was the lynchpin of the Kaminester decision.
In her decision, the Surrogate questioned whether the legislature had intended MHL §81.29(d) to override DRL §7. She also recognized that while she was bound by the First Department’s determination, the Second Department had previously taken the position that it had inherent power to override DRL § 7 by posthumously voiding a marriage due to the decedent’s mental incapacity (see Campbell v Thomas,36 AD3d 576 [2d Dept 2007]). Nonetheless, because of the First Department’s determination that the decedent’s marriage had been void ab initio as a result of his incapacity, the Surrogate opined that there existed no right to an elective share.
Notably, the result in Kaminester rendered the marriage in issue void, as opposed to voidable, which was the characterization in Berk. A voidable marriage is a nullity upon the court’s declaration, whereas a void marriage is deemed to never have existed. This distinction was based upon the fact that there had been an Article 81 adjudication in Kaminester, allowing for the application of MHL §81.29(d) after the decedent’s death.
Should a surviving spouse remain entitled to an elective share even if the marriage was procured by fraud or undue influence exercised upon the decedent, or if the decedent was incapacitated at the time of the marriage? In a recent case, Matter of Berk (20 Misc 3d 691 [Sur Ct, Kings County 2008]), the decedent’s estate opposed his widow’s notice of election alleging that circumstances of the marriage rendered it null and void ab initio, thereby eliminating her rights pursuant to EPTL 5-1.1-A. She moved for summary judgment.
The decedent died in 2006, leaving a will dated