Wife’s Death, After Executing Property Settlement Agreement But Before Final Divorce, Constitutes Waiver of Husband’s Right To Inherit

A few months prior to her death, Basabadatta Pattanayak and her husband Sandeep Srinath executed a Marital Settlement Agreement. The Agreement included a section entitled “Equitable Distribution,” in which they divided their property and relinquished spousal support, and agreed that the husband would pay health insurance until the dissolution of the marriage. When the Agreement was signed, the parties had been living separate and apart for two years, but at the time of the wife’s death, there had been no divorce hearing or judgment of divorce.

The wife died intestate on September 1, 2014. The Hudson County Surrogate granted letters of administration of her estate to the husband; the decedent’s parents then filed an Order to Show Cause seeking his removal and seeking an order directing him to file an accounting. Following oral argument, the chancery judge ruled in favor of the decedents’ parents: she removed the husband as administrator of the estate, ordered him to file an accounting, and ordered that he was not entitled to inherit under the estate as a “surviving spouse.”

The New Jersey statutes provide as follows:

N.J.S.A. 3B:8-10. Waiving right to an elective share

The rights… of the surviving spouse… may be waived, wholly or partially, before or after marriage… by a written contract, agreement or waiver, signed by the party waiving after fair disclosure. Unless it provides to the contrary, a waiver of “all rights” (or equivalent language) in the property or estate of a present or prospective spouse… or a complete property settlement entered into after or in anticipation of separation, [or] divorce … is a waiver of all rights to an elective share… and a renunciation …  of all benefits which would otherwise pass to him from the other by intestate succession….

The judge found that, pursuant to N.J.S.A. 3B:8-10, the Agreement was a complete property settlement in anticipation of divorce, thus precluding the husband from inheriting.

On appeal, the husband argued that the Agreement could not constitute a waiver of his right to inherit because there had been no hearing, so a genuine issue of fact existed as to whether his waiver was knowing and voluntary.  The Appellate Division disagreed. The appellate court concluded that, pursuant to N.J.S.A. 3B:8-10, the parties did not have to make an explicit waiver of intestacy rights under the Agreement because the Agreement demonstrated the parties’ intent to resolve all issues arising out of their marital relationship.

The husband also argued on appeal that the parties had never intended to separate and divorce, and that the term “equitable distribution” had never been explained to them. Again, his argument was rejected, with the record demonstrating that the parties had lived separate and apart for two years before they entered into the Agreement; moreover, the language of the Agreement established that they had entered into it following separation and in anticipation of divorce. Finally, the Agreement established that they had intended to make a final division of their property, and did not contemplate returning property to each other following either’s death.

The Appellate Division affirmed the lower court ruling in favor of the parents, finding no genuine issue of fact that would require a hearing.

A copy of In re Estate of Pattanayak  can be found here.

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