When a spouse dies and is survived by another spouse, there is sometimes confusion as to the rights of the surviving spouse. Part of the confusion may involve the often overlooked provisions of New York Estates Powers and Trusts Law (EPTL) section 5-3.1 - Exemption for Benefit of Family.
When a spouse dies, they may or may not have had a Last Will and Testament. If they had a Will, then the terms of the Will govern the distribution of their estate assets. If the spouse died without a Will, then they died “intestate”, which is a legal term for dying without a Will. If a spouse dies intestate, then the terms of the New York laws of intestacy (found in EPTL section 4-1.1) govern the distribution of their estate assets.
However, whether the spouse dies with or without a Will, certain assets of the decedent spouse pass outside of their estate and become the property of the surviving spouse – regardless of the terms of any Will or the provisions of the New York laws of intestacy. These assets are known as family exempt property assets pursuant to EPTL section 5-3.1.
Family exempt property assets, which pass to the surviving spouse, include the following:
• Money or marketable securities up to a value of $25,000.00.
• A motor vehicle up to a value of $25,000.00.
• Domestic and farm animals (and their necessary food), farm machinery, one tractor, and one lawn tractor up to a value of $20,000.00.
• The family bible, family pictures, books, various electronics, and media storage up to a value of $2,500.00.
• Various items of tangible personal property, including jewelry and household furnishings, up to a value of $20,000.00.
As you can see, the list of family exempt property passing to the surviving spouse is quite extensive. If all the items were available to pass at their maximum values allowed, collectively the assets would be valued at $92,500.00.
The values of the various assets are reduced by whatever security interests may apply. For example, if the car passing to a surviving spouse is worth $30,000.00 but is subject to a car loan of $10,000.00, then the car has a value of $20,000.00 under the statute. Cars are often passed to a surviving spouse pursuant to EPTL 5-3.1. The process to transfer the title can be accomplished at the local DMV office by filling out the proper forms and furnishing a death certificate for the decedent spouse.
As noted above, family exempt items of personal property passing to the surviving spouse are subject to any loans specifically against them, but they are not subject to the interests of estate creditors. For example, if a John Deere lawn tractor worth $5,000.00 passes to a surviving spouse as family exempt property, it would be subject to the $1,000.00 loan against it with John Deere Financial, but it would not be subject to other unrelated loans that the decedent spouse had obtained from other lenders for other purposes.
With the exception of jewelry, any item of family exempt property distributable to a surviving spouse cannot be given away by the decedent spouse in their Will. For example, if a decedent spouse leaves their car to their nephew in their Will, that provision is negated by the surviving spouse’s right to the car as family exempt property. As a result, the surviving spouse will receive the car and not the nephew.
The statutory provisions regarding family exempt property do have conditions and exceptions that must be understood. For example, if there are insufficient assets available in the estate of the decedent spouse to pay for their funeral expenses, then the $25,000.00 passing to the surviving spouse in cash or marketable securities can be tapped to pay for those expenses. There are additional provisions which apply if the values of assets exceed the statutory maximums, i.e. if the value of the decedent’s car (after the subtraction of any loans) exceeds the $25,000.00 limit.
When a spouse dies, it is a challenging time for the surviving spouse and the entire family. What legal provisions apply to the distribution of the assets can be confusing and can sometimes lead to unnecessary conflict within the family. After the death of a spouse, it is always advisable to seek experienced legal counsel to understand how the estate should be handled within applicable provisions of the law.
Matthew J. Dorsey, Esq. is a Partner with O’Connell and Aronowitz, 1 Court Street, Saratoga Springs. Over his twenty-one years of practice, he has focused in the areas of elder law, estate planning, and estate administration. Mr. Dorsey can be reached at 518-584-5205, This email address is being protected from spambots. You need JavaScript enabled to view it. and www.oalaw.com.
