Beneficiary Rights of Separated Spouses

The tragic deaths of celebrities Anthony Bourdain and Kate Spade brought attention to the critical importance of recognizing and treating depression.  In the case of Kate Spade, it also highlights the beneficiary rights of separated spouses.  Ms. Spade’s husband revealed that he and his wife had been separated for almost a year prior to her death.  Beneficiary rights of separated spouses in New Jersey have been addressed on several occasions in this blog; let’s review them.

Elective Share. What if, due to the separation, Ms. Spade sought to exclude her husband from the beneficial provisions of her Will?  As discussed here,  New Jersey spouses have the statutory right, unless validly waived in writing, to take up to one-third of the deceased spouse’s “Augmented Estate” regardless of the provisions of the deceased spouse’s Will.  See the prior post for details on how the Augmented Estate is calculated and the elective share, if any, is ultimately determined, but one requirement is particularly relevant to our example.  A prerequisite to claiming the elective share is that the surviving spouse and the deceased spouse must NOT have been living separate and apart at the time of death or ceased to cohabit as man and wife under circumstances that gave one spouse a cause of action for divorce.   Therefore, under New Jersey law, the elective share may not have been available to Mr. Spade.

Omitted Spouse.  What if Ms. Spade executed a Will before she and husband were married, but never updated it?  As discussed here, he could claim status as an “omitted spouse” which would entitle him to an intestate share of the estate (which could be the entire estate depending on the circumstances).

Funeral Arrangements.  What about funeral arrangements?   Would Mr. Spade have the authority to deal with that unpleasant, but necessary, task? As discussed here, absent an express designation in the Will, a spouse, irrespective of any separation, has the right to control funeral arrangements and disposition of remains for a deceased spouse.

Retirement Plans.  Finally, while not directly addressed in previous posts, perhaps one of the most important spousal rights is the right (granted by the Retirement Equity Act of 1984), absent an express written waiver, to inherit a deceased spouse’s pension or 401(k) (note that this rule does not apply to IRAs).

The bottom line is that while the elective share may not be available to spouses who separate, they should not assume that they have automatically given up all beneficiary rights if their spouse passes away. The above also highlights the need for careful planning in the event of what may be an extended separation, possibly leading to divorce, to ensure that testamentary desires are fully implemented.

If you have any questions about this post or any other matters, please contact me at jjcostellojr@nmmlaw.com.