5-1.1-A - Right of election by surviving spouse

§ 5-1.1-A Right of election by surviving spouse    (a)  Where  a  decedent  dies  on  or  after September first, nineteen  hundred ninety-two and is survived by a  spouse,  a  personal  right  of  election  is  given  to  the  surviving  spouse  to  take a share of the  decedent's estate, subject to the following:    (1) For the purpose of this section, the  decedent's  estate  includes  the capital value, as of the decedent's death, of any property described  in subparagraph (b) (1).    (2)  The  elective  share, as used in this paragraph, is the pecuniary  amount equal to the greater of (i) fifty thousand  dollars  or,  if  the  capital  value  of  the  net estate is less than fifty thousand dollars,  such capital value, or (ii) one third of the net  estate.  In  computing  the  net  estate,  debts, administration expenses and reasonable funeral  expenses shall be deducted, but all estate taxes shall  be  disregarded,  except  that nothing contained herein relieves the surviving spouse from  contributing to all such taxes the amounts apportioned  against  him  or  her under 2-1.8.    (3)  The  term  "testamentary  provision",  as used in this paragraph,  includes, in addition to  dispositions  made  by  the  decedent's  will,  distributions   of  property  pursuant  to  4-1.1  and  any  transaction  described as a testamentary substitute in subparagraph (b) (1).    (4) The share of the testamentary provisions to  which  the  surviving  spouse  is  entitled  hereunder (the "net elective share") is his or her  elective share, as defined in subparagraphs (1) and (2), reduced by  the  capital  value of any interest which passes absolutely from the decedent  to such spouse, or which would have passed absolutely from the  decedent  to  such  spouse but was renounced by the spouse, (i) by intestacy, (ii)  by testamentary substitute as described  in  subparagraph  (b)  (1),  or  (iii) by disposition under the decedent's last will.    (A)  Unless  the  decedent  has provided otherwise, if a spouse elects  under this section, such  election  shall  have  the  same  effect  with  respect to any interest which passes or would have passed to the spouse,  other  than  absolutely,  as though the spouse died on the same date but  immediately before the death of the decedent.    (B) For the purposes of this subparagraph  (4),  (i)  an  interest  in  property shall be deemed to pass other than absolutely from the decedent  to  the  spouse  if  the  interest  so passing consists of less than the  decedent's entire interest in that property or consists of any  interest  in  a  trust  or  trust  equivalent created by the decedent; and (ii) an  interest in property  shall  be  deemed  to  pass  absolutely  from  the  decedent  to  the  spouse  if  it  is  not  deemed  to  pass  other than  absolutely.    (5) Where a decedent dies before  September  first,  nineteen  hundred  ninety-four,  paragraphs  (c)(1)(D)  through  (c)(1)(K) of section 5-1.1  shall apply except that the words  "fifty  thousand  dollars"  shall  be  substituted for the words "ten thousand dollars" wherever they appear in  such paragraphs.    (b)  Inter  vivos dispositions treated as testamentary substitutes for  the purpose of election by surviving spouse.    (1) Where a person dies after August  thirty-first,  nineteen  hundred  ninety-two and is survived by a spouse who exercises a right of election  under paragraph (a), the transactions affected by and property interests  of the decedent described in clauses (A) through (H), whether benefiting  the   surviving  spouse  or  any  other  person,  shall  be  treated  as  testamentary substitutes and  the  capital  value  thereof,  as  of  the  decedent's  death,  shall  be  included in the net estate subject to the  surviving  spouse's  elective  right  except  to  the  extent  that  the  surviving  spouse has executed a waiver of release pursuant to paragraph(e) with respect thereto. Notwithstanding the foregoing, a  transaction,  other than a transaction described in clause (G), that is irrevocable or  is  revocable  only  with  the  consent of a person having a substantial  adverse  interest (including any such transactions with respect to which  the decedent retained a special  power  of  appointment  as  defined  in  10-3.2),  will  constitute  a  testamentary  substitute  only  if  it is  effected after the date of the marriage.    (A) Gifts causa mortis.    (B) The aggregate  transfers  of  property  (including  the  transfer,  release  or  relinquishment of any property interest which, but for such  transfer, release or relinquishment, would  come  within  the  scope  of  clause  (F)),  other than gifts causa mortis and transfers coming within  the scope of clauses (G) and (H), to or for the benefit of  any  person,  made  after August thirty-first, nineteen hundred ninety-two, and within  one year of the death of the decedent, to the extent that  the  decedent  did  not  receive  adequate  and  full consideration in money or money's  worth for such transfers; provided, however, that  any  portion  of  any  such  transfer  that  was  excludible  from  taxable  gifts  pursuant to  subsections (b) and (e) of section two thousand five  hundred  three  of  the  United States Internal Revenue Code, including any amounts excluded  as a result of the election by the surviving spouse to  treat  any  such  transfer  as  having  been  made  one  half  by him or her, shall not be  treated as a testamentary substitute.    (C) Money deposited, together with all dividends or interest  credited  thereon,  in  a savings account in the name of the decedent in trust for  another  person,  with  a  banking  organization,   savings   and   loan  association,  foreign  banking  corporation  or  organization or bank or  savings and loan association organized under  the  laws  of  the  United  States, and remaining on deposit at the date of the decedent's death.    (D)  Money  deposited  after  August  thirty-first,  nineteen  hundred  sixty-six, together with all dividends or interest credited thereon,  in  the  name  of  the  decedent  and  another  person and payable on death,  pursuant to the terms of the deposit or by  operation  of  law,  to  the  survivor,  with  a  banking  organization, savings and loan association,  foreign banking corporation or organization or bank or savings and  loan  association organized under the laws of the United States, and remaining  on deposit at the date of the decedent's death.    (E) Any disposition of property made by the decedent whereby property,  at the date of his or her death, is held (i) by the decedent and another  person  as  joint  tenants with a right of survivorship or as tenants by  the entirety where the disposition was made after  August  thirty-first,  nineteen  hundred  sixty-six,  or (ii) by the decedent and is payable on  his or her death to a person other than  the  decedent  or  his  or  her  estate.    (F) Any disposition of property or contractual arrangement made by the  decedent,  in  trust  or  otherwise, to the extent that the decedent (i)  after August thirty-first, nineteen hundred ninety-two, retained for his  or her life or for any period not ascertainable without reference to his  or her death or for any period which does not in fact end before his  or  her  death  the possession or enjoyment of, or the right to income from,  the property except to the extent that such disposition  or  contractual  arrangement was for an adequate consideration in money or money's worth;  or  (ii)  at  the  date  of his or her death retained either alone or in  conjunction with any other  person  who  does  not  have  a  substantial  adverse interest, by the express provisions of the disposing instrument,  a  power  to  revoke  such  disposition or a power to consume, invade or  dispose of the principal thereof. The provisions  of  this  subparagraph  shall  not  affect  the  right  of  any income beneficiary to the incomeundistributed or accrued at the date of death nor shall they  impair  or  defeat  any  right  which  has  vested on or before August thirty-first,  nineteen hundred ninety-two.    (G)  Any  money,  securities or other property payable under a thrift,  savings, retirement,  pension,  deferred  compensation,  death  benefit,  stock  bonus  or  profit-sharing  plan,  account, arrangement, system or  trust, except that with respect to a plan to which subsection  (a)  (11)  of  section  four hundred one of the United States Internal Revenue Code  applies or a defined contribution plan to which such subsection does not  apply pursuant to paragraph (B) (iii) thereof, only  to  the  extent  of  fifty   percent  of  the  capital  value  thereof.  Notwithstanding  the  foregoing,  a  transaction  described  herein  shall  not  constitute  a  testamentary  substitute  if  the decedent designated the beneficiary or  beneficiaries of  the  plan  benefits  on  or  before  September  first,  nineteen   hundred  ninety-two  and  did  not  change  such  beneficiary  designation thereafter.    (H) Any interest  in  property  to  the  extent  the  passing  of  the  principal  thereof  to or for the benefit of any person was subject to a  presently exercisable  general  power  of  appointment,  as  defined  in  section  two  thousand  forty-one  of the United States Internal Revenue  Code, held by the decedent immediately before his or her death or  which  the  decedent,  within one year of his or her death, released (except to  the extent such release results from a lapse of the power which  is  not  treated  as  a release pursuant to section two thousand forty-one of the  United States Internal Revenue Code) or exercised in favor of any person  other than himself or herself or his or her estate.    (I) A transfer of a security to a beneficiary pursuant to  part  4  of  article 13 of this chapter.    (2)  Transactions  described in clause (D) or (E) (i) shall be treated  as testamentary substitutes in the proportion that the funds on  deposit  were  the property of the decedent immediately before the deposit or the  consideration for the property described in clause (E) (i) was furnished  by  the  decedent.  The  surviving  spouse  shall  have  the  burden  of  establishing  the  proportion  of the decedent's contribution; provided,  however, that where the surviving spouse  is  the  other  party  to  the  transaction, it will be conclusively presumed that the proportion of the  decedent's   contribution   is   one-half.   For  the  purpose  of  this  subparagraph, the court may accept such  evidence  as  is  relevant  and  competent,  whether  or  not  the  person  offering  such evidence would  otherwise be competent to testify.    (3) The property referred to in clause (E) shall include United States  savings bonds and other United States obligations.    (4) The provisions of this paragraph shall not prevent  a  corporation  or  other  person from paying or transferring any funds or property to a  person  otherwise  entitled  thereto,  unless  there  has  been   served  personally  upon such corporation or other person a certified copy of an  order enjoining such payment or transfer made by the  surrogate's  court  having  jurisdiction  of  the  decedent's  estate or by another court of  competent  jurisdiction.  A  corporation  or  other  person  paying   or  transferring   any   funds  or  property  described  in  clause  (G)  of  subparagraph one of  this  paragraph  to  a  person  otherwise  entitled  thereto,  shall  be held harmless and free from any liability for making  such payment or transfer, in any action  or  proceeding  which  involves  such  funds  or  property.  Such  order  may  be made, on notice to such  persons and in such manner as the court may direct, upon application  of  the surviving spouse or any other interested party and on proof that the  surviving  spouse  has  exercised  his  or  her  right of election under  paragraph (a). Service  of  a  certified  copy  of  such  order  on  thecorporation  or  other  person  holding such fund or property shall be a  defense, during the effective period of the  order,  in  any  action  or  proceeding which involves such fund or property.    (5)  This paragraph shall not impair or defeat the rights of creditors  of the decedent with respect to any matter as to which any such creditor  has rights.    (6) In case of  a  conflict  between  this  paragraph  and  any  other  provision  of  law  affecting the transactions described in subparagraph  (1) of this paragraph, this paragraph controls.    (7) If any part of this section  is  preempted  by  federal  law  with  respect  to a payment or an item of property included in the net estate,  a person who, not for value, received that payment or item  of  property  is  obligated  to return to the surviving spouse that payment or item of  property or is personally liable to the surviving spouse for the  amount  of  that  payment  or  the value of that item of property, to the extent  required under this section.    (c) General provisions governing right of election.    (1) Where an election has been made under this section,  the  will  or  other instrument making a testamentary provision, as the case may be, is  valid as to the residue after the share to which the surviving spouse is  entitled  has  been  deducted,  and the terms of such will or instrument  remain otherwise effective so far as possible, subject, however, to  the  provisions of clause (a)(4)(A).    (2)  Except  as  otherwise  expressly  provided  in  the will or other  instrument making a testamentary provision, ratable contribution to  the  share  to  which  the  surviving spouse is entitled shall be made by the  beneficiaries and distributees (including the  recipients  of  any  such  testamentary  provision),  other  than  the  surviving spouse, under the  decedent's will, by intestacy and other instruments making  testamentary  provisions,  which  contribution  may be made in cash or in the specific  property received from the decedent by the person required to make  such  contribution  or  partly  in  cash  and  partly in such property as such  person in his or her discretion shall determine.    (3) The right of election is personal to the surviving spouse,  except  that an election may be made by:    (A)  The  guardian  of  the  property  of  an  infant  spouse, when so  authorized by the court having jurisdiction of the decedent's estate.    (B) The committee of an incompetent spouse, when so authorized by  the  court that appointed the committee.    (C) The conservator of a conservatee spouse, when so authorized by the  court that appointed the conservator.    (D)  The guardian ad litem for the surviving spouse when so authorized  by the court that appointed such guardian.    (E) A guardian authorized under Article 81 of the mental hygiene  law,  when so authorized by the court that appointed the guardian.    (4)  Any  question  arising  as  to  the  right  of  election shall be  determined by the court having jurisdiction of the decedent's estate  in  a  proceeding  brought  for  that  purpose  on  notice to all interested  persons in such manner as the court may direct, or in a  proceeding  for  the judicial settlement of the accounts of the personal representative.    (5)  Upon  application  by a surviving spouse who has made an election  under this  section,  the  court  may  make  an  order  cancelling  such  election,  provided  that  no  adverse  rights  have  intervened  and no  prejudice is  shown  to  creditors  of  such  spouse  or  other  persons  interested  in  the  estate. Such application shall be made on notice to  such persons and in such manner as the court  may  direct.  A  certified  copy of such order shall be indexed and recorded in the same manner as anotice of pendency of an action in the office of the clerk of the county  in which any real property of the decedent is situated.    (6)  The right of election granted by this section is not available to  the spouse of a decedent who was not domiciled in this state at the time  of death, unless such decedent  has  elected,  under  paragraph  (h)  of  3-5.1,  to  have the disposition of his or her property situated in this  state governed by the laws of this state.    (7) The decedent's estate shall include all property of  the  decedent  wherever situated.    (8)  An election made by the surviving spouse under this section is in  lieu of any right of dower to which such spouse may be entitled.    (9) The references in this paragraph to sections of the United  States  Internal  Revenue  Code  are  to  the  Internal Revenue Code of 1986, as  amended.  Such  references,  however,  shall  be  deemed  to  constitute  references to any corresponding provisions of any subsequent federal tax  code.    (d) Procedure for exercise of right of election.    * (1)  An  election  under this section must be made within six months  from the date of issuance of letters testamentary or of  administration,  as  the case may be, but in no event later than two years after the date  of decedent's death. Written notice of such  election  shall  be  served  upon  any personal representative in the manner herein provided, or upon  a person named as executor in a will on file in the surrogate's court in  a case where such will has not yet been admitted  to  probate,  and  the  original  thereof shall be filed and recorded, with proof of service, in  the surrogate's court in which  such  letters  were  issued  within  six  months  from  the  date of the issuance of letters but in no event later  than two years from the date of decedent's death.  Such  notice  may  be  served   by   mailing   a   copy  thereof,  addressed  to  any  personal  representative, or to the nominated executor, as the case may be, at the  place of residence stated in the designation required by SCPA 708 or  in  such other manner as the surrogate may direct.    * NB Effective until January 1, 2011    * (1)  An  election  under this section must be made within six months  from the date of issuance of letters testamentary or of  administration,  as  the case may be, but in no event later than two years after the date  of decedent's death, except as otherwise provided in subparagraph  2  of  this paragraph. Written notice of such election shall be served upon any  personal  representative in the manner herein provided, or upon a person  named as executor in a will on file in the surrogate's court in  a  case  where  such  will has not yet been admitted to probate, and the original  thereof shall be filed and recorded,  with  proof  of  service,  in  the  surrogate's  court  in  which such letters were issued within six months  from the date of the issuance of letters but in no event later than  two  years from the date of decedent's death, except as otherwise provided in  subparagraph 2 of this paragraph. Such notice may be served by mailing a  copy  thereof,  addressed  to  any  personal  representative,  or to the  nominated executor, as the case may be, at the place of residence stated  in the designation required by section  708  of  the  surrogate's  court  procedure act or in such other manner as the surrogate may direct.    * NB Effective January 1, 2011    * (2) The time to make such election may be extended before expiration  by  an order of the surrogate's court from which such letters issued for  a further period not exceeding six months upon any one  application.  If  the  spouse defaults in filing such election within the time provided in  subparagraph (d) (1), the surrogate's court may relieve the spouse  from  such  default  and authorize the making of an election within the period  fixed by the order, provided that no decree settling the account of  thepersonal  representative  has  been made and that twelve months have not  elapsed since the issuance of the letters.  An  application  for  relief  from  the  default  and  for an extension of time to elect shall be made  upon  a  petition showing reasonable cause and on notice to such persons  and in such manner as the surrogate may direct. A certified copy of such  order shall be indexed and recorded in the same manner as  a  notice  of  pendency of an action in the office of the clerk of each county in which  real property of the decedent is situated.    * NB Effective until January 1, 2011    * (2) The time to make such election may be extended before expiration  by  an order of the surrogate's court from which such letters issued for  a further period not exceeding six months upon any one  application.  If  the  spouse defaults in filing such election within the time provided in  subparagraph (1) of this paragraph, the surrogate's  court  may  relieve  the  spouse  from  such  default and authorize the making of an election  within the period fixed by the order, provided that no  decree  settling  the account of the personal representative has been made and that twelve  months have not elapsed since the issuance of the letters, and two years  have  not  elapsed  since  the  decedent's date of death, in the case of  initial application; except that the court may, in  its  discretion  for  good  cause  shown,  extend  the  time to make such election beyond such  period of two years. An application for relief from the default and  for  an  extension  of  time  to  elect shall be made upon a petition showing  reasonable cause and on notice to such persons and in such manner as the  surrogate may direct. A certified copy of such order  shall  be  indexed  and  recorded in the same manner as a notice of pendency of an action in  the office of the clerk of each county in which  real  property  of  the  decedent is situated.    * NB Effective January 1, 2011    (3)  The  time  limited  in  this  paragraph for making an election is  exclusive and shall not  be  suspended  or  otherwise  affected  by  any  provision  of  law,  except  that  the  surrogate  may,  in  his  or her  discretion, permit an election to be made in  behalf  of  an  infant  or  incompetent  spouse  at  any time up to, but no later than, the entry of  the decree of the first judicial account of the  representative  of  the  estate, made more than seven months after the issuance of letters.    (e) Waiver or release of right of election.    (1) A spouse, during the lifetime of the other, may waive or release a  right  of election, granted by this section, against a particular or any  last will or a testamentary substitute, as described in subparagraph (b)  (1) made by the other spouse. A waiver or release of all rights  in  the  estate of the other spouse is a waiver or release of a right of election  against any such last will or testamentary provision.    (2) To be effective under this section, a waiver or release must be in  writing  and subscribed by the maker thereof, and acknowledged or proved  in the manner required by the laws of this state for the recording of  a  conveyance of real property.    (3)  Such  a  waiver  or  release is effective, in accordance with its  terms, whether:    (A) Executed before or after the marriage of the spouses.    (B) Executed before, on or after  September  first,  nineteen  hundred  sixty-six.    (C)  Unilateral  in  form,  executed  only  by  the  maker thereof, or  bilateral in form, executed by both spouses.    (D) Executed with or without consideration.    (E) Absolute or conditional.    (4) If there is in effect at  the  time  of  the  decedent's  death  a  waiver, or a consent to the decedent's waiver, executed by the survivingspouse  with  respect to any survivor benefit, or right to such benefit,  under subsection (a) (11) of section four hundred one  or  section  four  hundred  seventeen of the United States Internal Revenue Code, then such  waiver  shall  be  deemed  to  be  a  waiver  within the meaning of this  paragraph (e) against  the  testamentary  substitute  constituting  such  benefit.