Elective Share Update – What Does it Mean to Be Living Separate and Apart or Ceasing to Cohabitate as Man and Wife?

We addressed a spouse’s elective share in a previous post in the context of whether one spouse in a married couple could effectively disinherit his or her surviving spouse.  New Jersey spouses have the statutory right, unless validly waived in writing, to take up to one-third of their deceased spouse’s augmented estate regardless of the provisions of the deceased spouse’s Will.

A prerequisite to being able claim 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 have ceased to cohabit as man and wife under circumstances that gave one spouse a cause of action for divorce.   The Appellate Division of the New Jersey Superior Court recently addressed that requirement in the case of In The Matter of Arthur Brown, deceased.

In that case, Arthur and his wife, Mary, lived in a jointly-owned condominium before Arthur moved into an assisted living facility in April 2007.  As is common in these situations, all of the couple’s assets were transferred to Mary (as the healthy spouse) and she then executed a Will that made no provision for Arthur should she predecease him.  Arthur was eventually transferred to a nursing home, suffering from Alzheimer’s Disease, and qualified for Medicaid.   Mary predeceased him on September 9, 2010.

The NJ Division of Medical and Health Services (“DMAHS”), which administers Medicaid in New Jersey, asserted that Arthur’s failure to claim his elective share from Mary’s estate was a transfer of assets that rendered him ineligible for Medicaid.  Arthur subsequently died and DMAHS filed a lien against his estate for reimbursement of benefits paid on his behalf, claiming that the lien extended to Mary’s estate to the extent of the proceeds from the sale of their jointly-held condo.

Arthur’s estate argued that the elective share was not available to Arthur, because Arthur and Mary did not live together as husband and wife for more than three years prior to her death.   The court disagreed, holding that even though they lived apart for three years, there was no evidence that: (1) the couple was estranged; (2) no longer considered themselves husband and wife; or (3) they had any intention of terminating their marriage and considered their marriage “dead.”  In short, mere separation was not enough to bar Arthur from claiming the elective share.

The decision is instructive to both married couples involved in traditional Medicaid planning and those contemplating divorce.  In both situations, the elective share will continue to be viable notwithstanding separation of even an extended period, without other steps to indicate that the separation is in furtherance of a divorce.

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