John George (1791) drafted a will seeking to cut his wife, Elizabeth, out of what would otherwise be a presumably large estate. He did so by leaving her a single shilling:
“Seeing that I had the misfortune to be married to the aforesaid Elizabeth, who, ever since our union, has tormented me in every possible way; she has done all she could to render my life miserable; that Heaven seems to have sent her into the world solely to drive me out of it; that the strength of Samson, the genius of Homer, the prudence of Augustus, the skill of Pyrrhus, the patience of Job, the philosophy of Socrates, the subtlety of Hannibal, would not suffice to subdue the perversity of her character…weighing seriously all these considerations…I bequeath, to my said wife Elizabeth, the sum of one shilling.” (Reprinted from www.nytimes.com via Getting the Last Word, or, “A Good Stout Rope” by Eric Penzer, Esq.)
Can you really cut your spouse out of your estate?
Plainly, No. These days, at least in New York, you cannot completely cut your spouse out of your estate. Every surviving spouse is entitled to a spousal elective share of 1/3 of the decedent’s gross estate. What this means is that after adding up the value of all the decedent’s assets (including non-probate assets such as trust funds, jointly held property, and beneficiary accounts), the surviving spouse is entitled to 1/3 of the total value. In other words, the smallest amount a surviving spouse is entitled to is 1/3 of the value of everything the decedent owned at death.
The difference between the probate estate and the gross estate is a somewhat confusing distinction but your estate attorney can assist you in making that determination. For now, let’s use an example: suppose John George, from our story above, died as a resident of Manhattan with a will leaving his wife, Elizabeth, a $100,000.00 inheritance. However, John took out a life insurance policy with a payout of $500,000.00 and named his son, Phillip, as the sole beneficiary. John also had an apartment in Brooklyn which he owned jointly with Phillip and which the executor of John’s will sold for $600,000.00. Lastly, John had an Individual Retirement Account worth $250,000.00 which named Phillip as the sole beneficiary and a savings account with $50,000.00 in it.
Except for the savings account, every other asset mentioned in the previous paragraph is a non-probate asset meaning it flows to the beneficiary automatically and outside of the estate. But wait – John left his wife $100,000.00 and the only estate asset is the savings account funded with $50,000.00. And further, I wrote above that the surviving spouse is entitled to 1/3 of the gross estate. So how does it work?
Practically speaking, the surviving spouse would hire a probate lawyer to figure out her elective share and then file the appropriate paperwork with the Surrogate’s Court, perhaps engaging in estate litigation. But for Elizabeth’s hypothetical situation, let’s figure it out right here. First, we add up the decedent’s gross estate:
Life Insurance = $500,000.00
Brooklyn Apartment = $600,000.00
IRA = $250,000.00
Savings Account = $50,000.00
TOTAL = $1,400,000.00
Then, we divide the total by 3. John’s gross estate totals $1.4M so his surviving spouse is entitled to 1/3 of that figure which means Elizabeth gets $466,666.67 – much more than the $100,000.00 he left her in his last will & testament.
Despite the terms of John’s last will & testament, Elizabeth doesn’t get cut out of John’s estate because surviving spouses are entitled, under the law, to receive at least 1/3 of the decedent’s gross estate. Sometimes estate executors do the right thing. Other times, they either purposely or accidentally exclude a surviving spouse. This is one reason why it is important to have a knowledgeable New York probate attorney representing you as executor. On the flip side, if you’re in Elizabeth’s situation, you need an experienced estate lawyer to represent your interest as surviving spouse to obtain your rightful inheritance under the law.
Exceptions: The major exception to the spousal elective share is informed consent. If the surviving spouse was fully informed of the extent of her husband’s estate and executes a written consent agreeing to receive less than the 1/3 spousal elective share, then, upon the husband’s death, the surviving wife would not be entitled to the spousal elective share.