By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate and Probate Law Attorney

A question I often receive is whether a spouse can disinherit their spouse. A client wants their children, their favorite charity, their pet (see my video on dying with your pet HERE) to inherit their estate, but leave their spouse high and dry.  Whatever their reason, the simple answer to that question is “no”.  Under the laws of most states, upon death, a spouse may elect to disregard the will of their significant other and take their elective share of the estate.  In New Jersey, the elective share is considered 1/3 of the value of the assets within the estate.  And don’t think you can simply transfer your property by use of beneficiary designations (see my many blog posts on the use of beneficiary designation), as the courts have figured this trick out, and will return the value back into calculating the elective share.  But what makes up the estate for purposes of valuing the spouse’s elective share?  A recent case that came down from a nearby state helps clarify this matter a bit.

John Bays and Carole married in 2000, and had one son. In 2000, Carole obtained a life insurance policy and named her husband initially as the beneficiary.  She then obtained a second life insurance policy in 2001 that would give 80% to John and 20% to the son.  In September 2007, Carole executed a new will that largely disinherited John.  At the same time, she created two trusts, and changed the beneficiary of both policies to be the trusts.  She died one month later.  John then filed to renounce the 2007 will and obtain his elective share.  He then sought to have the life insurance included in the court’s calculation of the elective share.  The trial court granted his request, holding he did not consent to the change in beneficiary, making this a fraudulent transfer subject to being included as part of John’s elective share.

But the Court of Appeals and the Supreme Court reversed the trial court.  Unlike fraudulent schemes where real estate is purchased with the decedent’s funds in the name of a 3rd person or money is transferred into a joint account with a third party, changing a beneficiary of a life insurance policy is not fraudulent.  In order for something to be a part of an estate, it must have belonged at some point to the dead spouse during her lifetime.  Life insurance proceeds, it held, do not fall into this category.  John’s interest in the property was at most provisional, and Carole had an “absolute right” to change the beneficiary.  Carole never owned the proceeds, so John’s interest could never attach to the proceeds.  One of the policies contained an acceleration clause that Carole could use to convert to cash, and the court held that created no interest for John in the property, as John could not force her to use it for his share.  Because John truly never had an interest in the property, it could not be a part of the elective share.

So what does this mean?  You can only take an elective share on property that was owned by the spouse, and the doctrine of using fraudulent transfers to calculate the elective share only applies to property within the spouse’s control, with life insurance not within that realm.  One more thing to note.  The Court affirmed the idea of changing a beneficiary of life insurance an “absolute right.”  We have yet another case of making sure you know who your beneficiaries of life insurance and pension plans are.  We saw how the courts will not reform a beneficiary after death despite a divorce, and now we see a court saying the husband is not entitled to life insurance as a part of his elective share because he is not a named beneficiary.

To discuss your NJ Estate Planning or Probate Litigation matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.