Requires fair and reasonable disclosure of income, assets and financial obligations of decedent for surviving spouse's waiver of right of election to be enforceable and renders inapplicable the "dead man's statute" for purposes of accepting relevant evidence in this regard and in regard to Totten trust and joint bank account transactions.
TITLE OF BILL: An act to amend the estates, powers and trusts law, in relation to the waiver of a right of election by a surviving spouse
PURPOSE OF BILL: The bill would require that a spouse be given a fair and reasonable disclosure of the financial situation of the other spouse before waiving a right of election against the other spouse's estate.
SUMMARY OF PROVISIONS OF BILL: The bill requires that the waiver of a right of election may not be enforced against a surviving spouse who proves that the decedent did not provide such spouse with a "fair and reasonable disclosure of the income, assets, and financial obligations" of the decedent. This requirement would not apply, however, if the surviving spouse had specifically waived such disclosure or if such spouse had independent knowledge of the decedent's financial situation.
The bill also provides that in determining whether the surviving spouse had been provided with, or waived, financial disclosure, or had independent knowledge of the decedent's financial situation, the court is not bound by the limitations of the dead person's statute. Subparagraph 2 of paragraph (b) of section 5-1.1-A of the EPTL is amended so its language that overrides the dead person's statute is consistent with the new language and clear as to its intent.
Finally, under the bill the surviving spouse will continue to have available any common law defense such as fraud, involuntariness and unconscionability.
JUSTIFICATION: In 1992 the Legislature enacted EPTL 5-1.1-A to improve and render more equitable the right of a surviving spouse to exercise a right of election against the estate of a decedent spouse. This enactment gave added significance to spousal agreements, whether made before or after marriage, especially those containing a waiver of the new 5-1.1-A elective right.
Under current law a waiver will not be effective if unconscionable, involuntary, or the product of fraud or overreaching by the decedent spouse. Current law does not, however, require financial disclosure as a condition to the enforceability of such a waiver. In changing the law to require such disclosure, this bill would render the law of New York consistent with the common law requirements of fundamental fairness prevailing in other states and with the three uniform acts on the subject (the Uniform Probate Code, the Uniform Premarital Agreement Act, and the Uniform Marital Property Act.) At the same time, the bill would preserve to the surviving spouse the right to assert existing common law defenses such as fraud, involuntariness, and unconscionability.
LEGISLATIVE HISTORY: 2009-10: A.2873 - Veto Memo
6 2007-08: A.3060 - Passed Assembly 2006: A.5855 - Passed Assembly 2005: A.5855 - Passed Assembly 2003-04: A.4773 - Passed Assembly 2001-02: A.4440 - Passed Assembly 1999-00: A.3599 - Assembly Calendar 1997-98: A.5586 - Passed Assembly 1996: A.6114-A - Passed Assembly 1995: A.6114-A - Rules Committee
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect on the 1st of September next succeeding the date on which it shall have become a law and shall apply to waivers executed on or after its effective date.
STATE OF NEW YORK ________________________________________________________________________ 3348 2011-2012 Regular Sessions IN SENATE February 17, 2011 ___________Introduced by Sen. BONACIC -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the estates, powers and trusts law, in relation to the waiver of a right of election by a surviving spouse THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph 2 of paragraph (b) of section 5-1.1-A of the estates, powers and trusts law, as amended by chapter 515 of the laws of 1993, is amended to read as follows: (2) Transactions described in clause (D) or SUBCLAUSE (I) OF CLAUSE (E)
[(i)]OF SUBPARAGRAPH (1) shall be treated as testamentary substi- tutes 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 SUBCLAUSE (I) OF clause (E) [(i)]OF SUBPARAGRAPH (1) 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 subpar- agraph, SECTION FORTY-FIVE HUNDRED NINETEEN OF THE CIVIL PRACTICE LAW AND RULES SHALL NOT APPLY, AND 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]SUCH EVIDENCE WOULD BE EXCLUDED PURSUANT TO SECTION FORTY-FIVE HUNDRED NINETEEN OF THE CIVIL PRACTICE LAW AND RULES. S 2. Paragraph (e) of section 5-1.1-A of the estates, powers and trusts law is amended by adding a new subparagraph 5 to read as follows: (5) A WAIVER OR RELEASE OF RIGHT OF ELECTION IS NOT ENFORCEABLE AGAINST THE SURVIVING SPOUSE IF SUCH SPOUSE PROVES, BY A PREPONDERANCE OF THE EVIDENCE, THAT SUCH SPOUSE WAS NOT PROVIDED A FAIR AND REASONABLE DISCLOSURE OF THE INCOME, ASSETS, AND FINANCIAL OBLIGATIONS OF THE DECE-EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08412-01-1 S. 3348 2
DENT PRIOR TO THE EXECUTION OF THE WAIVER OR RELEASE, PROVIDED, HOWEVER, THAT THIS SUBPARAGRAPH SHALL NOT APPLY IF IT APPEARS THAT (I) THE SURVIVING SPOUSE VOLUNTARILY AND EXPRESSLY WAIVED OR RELEASED, IN THE MANNER PROVIDED IN SUBPARAGRAPH (2), ANY RIGHT TO DISCLOSURE BEYOND THE DISCLOSURE PROVIDED, OR (II) SUCH SPOUSE HAD SUFFICIENT KNOWLEDGE OF THE INCOME, ASSETS AND FINANCIAL OBLIGATIONS OF THE DECEDENT PRIOR TO THE EXECUTION OF THE WAIVER OR RELEASE. FOR THE PURPOSES OF THIS SUBPARA- GRAPH, SECTION FORTY-FIVE HUNDRED NINETEEN OF THE CIVIL PRACTICE LAW AND RULES SHALL NOT APPLY, AND THE COURT MAY ACCEPT SUCH EVIDENCE AS IS RELEVANT AND OTHERWISE COMPETENT, WHETHER OR NOT SUCH EVIDENCE WOULD BE EXCLUDED PURSUANT TO SECTION FORTY-FIVE HUNDRED NINETEEN OF THE CIVIL PRACTICE LAW AND RULES. THIS SUBPARAGRAPH SHALL NOT PRECLUDE THE ASSERTION OF ANY COMMON LAW DEFENSES BY SUCH SURVIVING SPOUSE. S 3. This act shall take effect on the first of September next succeeding the date on which it shall have become a law, provided, however that section two of this act shall apply only to waivers or releases, of a spouse's right of election, executed on or after such effective date.