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In Stephenson v. Spiegle, Jack M. Murray (“Murray”) executed a Will prepared by an attorney, William E. Spiegle, III (“Attorney”). See Stephenson v. Spiegle, 429 NJ Super 378 (App. Div. 2013) at 380. The Will left his estate to his family. It stated that any assets he had – whether owned by him directly or through a trust that he might create for the benefit of his family – should pass to his family.
The Pay-On-Death Account
About two months later, Murray went to a bank and opened a pay-on-death account (“Account”). Id. A pay-on-death account is one that directs who will receive its balance when the account-holder dies, the beneficiary. Initially, Murray wanted his family trust to be the beneficiary of the Account. That would have meant that the balance would go to the trust and in turn (as stated in the Will), to his family members. Id. Unfortunately, a bank representative dissuaded Murray from including this instruction because he did not have the trust documents with him at that time. Id. Accordingly, Murray took the interim step of naming his Attorney as the beneficiary, with the intent that Murray would change it to the trust at a later time. Id.
Unfortunately, Murray did not do so before he passed away less than a year later. Murray left approximately one-third of his estate, $143,151.26 (“Balance”), in the Account. Id. This meant that the Attorney – rather than Murray’s family – was technically entitled to receive the Balance.
The executor (“Executor”) of Murray’s estate (the person in charge of distributing Murray’s estate assets) discovered the Account. Id. He contacted the Attorney who understandably took the position that the Attorney was the Account’s sole beneficiary.
I have no idea why this [Account] was established. It was established approximately six weeks after [Murray] executed his will in my office, which leads me to believe the intent of this [Account] was clearly to take it outside the estate itself. I have no idea what motivated this action. I was completely unaware that this had occurred. I had not seen nor talked with [Murray] since the day he left my office December 16, 2006. I can only surmise that something happened on his way to Florida or after he got to Florida for him to take this action…
…I have looked at this situation from various points of view seeking to fathom the intent of this [Account]. I come back to the only conclusion that I can draw, which is—for whatever reason—[Murray] wanted me to have [the Balance].
Id. at 381.
The Executor disagreed. He initiated a lawsuit in the Chancery Division of the Superior Court of New Jersey (“Chancery Court”) to preclude the Attorney from receiving the Balance and to ensure that it was utilized for the benefit of Murray’s family. Id. The Executor argued that Murray made a mistake when he named Attorney as the beneficiary of the Account Id.
The Court’s Ruling
The Chancery Court agreed,findingthat it was “virtually inconceivable” that Murray intended to benefit Attorney rather than his family. Id. at 383. In support of that position, the Chancery Court specifically pointed to the fact that Murray made a Will that left his entire estate to his family members less than two months prior. This showed his intent to care for his family. Id. at 382-383.
Accordingly, the Chancery Court held that notions of fairness required it to grant rescission of the Account. Id. at Id. at 381. Rescission is a legal remedy rendering a contract (in this case the one governing the Account) null and void. In this case, rescission of the Account allowed the Balance to go directly to Murray’s estate and hence, his family.
The Attorney appealed the Chancery Court’s decision to the Appellate Division of the New Jersey Superior Court (“Appellate Court”) claiming that the grant of rescission of the Account was improper. Id. The Appellate Court disagreed. Id. at 387.
The Appellate Court explained that it was proper for the Chancery Court to grant rescission of the Account because it was clear that Murray created the Account to pass to his family members and mistakenly thought that designating his attorney as the “pay-on-death” beneficiary would accomplish that. Id. at 384-385. In other words, regardless of the mistaken idea that designating the attorney would effectively mean the money would go to his family, the obvious intent was that Murray wanted his family to receive the Account balance. Id.
Accordingly, the Appellate Court upheld the Chancery Court’s rescission of the Account. Id. at 387. Therefore, despite the fact that Attorney was technically named as the beneficiary of the Account, the Balance was given to Murray’s family members instead of Attorney. Id.
© 2013 Nissenbaum Law Group, LLC
In In re Estate of Pakdee B. Peck, a deceased spouse (“Decedent”) had signed two wills: one in New Jersey (“NJ Will”) and one in Thailand (“Thailand Will”). The NJ Will stated that it was Decedent’s “[e]xpress wish and desire that [Decedent’s] husband, Robert M. Peck [“Husband”] receive only his elective share of [Decedent’s] estate as defined in N.J.S.A. 3B:8-1.” In re Estate of Pakdee B. Peck, 429 N.J. Super. 409 (Ch. Div. 2012) at 411. The question was whether that elective share would include property outside the United States.
The Definition of the Term “Elective Share”
What does the term elective share (“Elective Share”) mean when it is used in relation to a spouse’s estate? That question is answered in New Jersey Statute 3B:8-1, which states:
If a married person or person in a domestic partnership dies domiciled in this State, on or after May 28, 1980, the surviving spouse or domestic partner has a right of election to take an elective share of one-third of the augmented estateunder the limitations and conditions hereinafter stated, provided that at the time of death the decedent and the surviving spouse or domestic partner had not been living separate and apart in different habitations or had not ceased to cohabit as man and wife, either as the result of judgment of divorce from bed and board or under circumstances which would have given rise to a cause of action for divorce or nullity of marriage to a decedent prior to his death under the laws of this State.
Id.; emphasis added.
In other words, the Elective Share prevents a surviving spouse from being completely disinherited; at the very least, he or she will have the right to one-third (1/3) of the decedent’s augmented estate. It should be noted that the decedent’s property that falls outside of the augmented estate is not included in the one-third (1/3) calculation of the surviving spouse’s share.
What is an Augmented Estate?
A decedent’s augmented estate generally includes the property that she left in her will plus certain other property of the decedent such as certain gifts and joint bank accounts. Specifically, “augmented estate” is defined in N.J.S.A. 3B:8-3, which states:
The “augmented estate” means the estate reduced by funeral and administration expenses, and enforceable claims, to which is added the value of property transferred by the decedent at any time during marriage, or during a domestic partnership, to or for the benefit of any person other than the surviving spouse or domestic partner, to the extent that the decedent did not receive adequate and full consideration in money or money’s worth for the transfer, if the transfer is of any of the following types:
- Any transfer made after May 28, 1980, under which thedecedent retained at the time of his death the possession or enjoyment of, or right to income from, the property;
Id.; emphasis added.
Is property outside the U.S. counted as part of the Elective Share?
In In re Estate of Pakdee B. Peck, the Husband filed a lawsuit asking for his elective share of Decedent’s augmented estate. Id. at 412. He claimed that the real property, bank accounts and investments owned by the Decedent in Thailand (“Thailand Property”) should all have been counted as part of the Decedent’s augmented estate. Id. In other words, he claimed that his elective share included not only 1/3 of the property owned by Decedent in New Jersey but also 1/3 of the Thailand Property. Id.
The attorney for the deceased wife’s estate argued that Decedent’s augmented estate did not include the Thailand Property. Therefore, the Husband had no right to it.
The Estate’s legal position was that this was the deceased wife’s probable intent. Id. It based this on the following:
- The NJ Will did not refer to any previous wills or property located outside of the United States. Id.at 411.
- Decedent advised the attorney that drew up her will that “she had prepared and signed a previous will in Thailand relating to property owned [by her] in Thailand and [that she] did not wish to make a specific reference to preserving the terms of that will the [NJ Will] for the reasons discussed.” Id. at 411-412.
- At the same time the deceased wife signed her NJ Will, she also signed a separate document witnessed by two people and acknowledged by a notary public, in which she ratified the provisions of the Thailand Will disposing of all of her property in Thailand. Id.at 412.
- The Decedent expressed her intention to the attorney that drafted the NJ Will that the NJ Will dispose only of the property that she owned within the United States. Id.
Despite all this evidence that Decedent did not want her husband to receive 1/3 Elective Share of the Thailand Property, the Court held, in favor of Husband. This meant that the Thailand Property was to be included in Decedent’s augmented estate. Id.at 415. The Court stated the basis of its holding as follows:
- There was no evidence establishing that at the time of Decedent’s death she did not retain possession or enjoyment of the real and personal property in Thailand. Id.at 414.
- It is of no significance that the property was located in a foreign country because—pursuant to N.J.S.A. 3B:8-2— the augmented estate “includes real property to the same extent as it would be included if it were located in New Jersey.” Id.; See also N.J.S.A. 3B:8-2.
- It did not matter whether the Decedent wanted her surviving spouse to have a one-third 1/3 right to her Thailand property because the Elective Share statute was enacted with the purpose of prohibiting the disinheritance of a surviving spouse who needs continuous support. Id.at 415 Therefore, the elective share was not created to carry out the decedent’s probable intent but rather to ignore it in order to protect the surviving spouse. Id.
Accordingly, the Court held that the Thailand Property was to be included as a part of the Decedent’s augmented estate. Therefore, it was included in the calculation of Husband’s 1/3 share of the Decedent’s estate. Id.
The Court’s holding articulated two important principles:
- Under certain circumstances, foreign property may be included in a decedent’s augmented estate; and
- A surviving spouse’s right to his elective share may sometimes overshadow the deceased spouse’s probable intent.
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A party to these Terms and Conditions may not institute a suit at law or equity regarding any dispute, whether directly or indirectly related or collateral to these Terms and Conditions. All such claims or disputes, whether between or among the parties, shall be submitted to arbitration administered by a mutually acceptable arbitrator affiliated with the American Arbitration Association and its rules and guidelines shall apply, or its International Centre for Dispute Resolution, if applicable. Without limitation, any dispute over the arbitrability of a matter shall be specifically reserved for the arbitrator to exclusively hear, and shall not be submitted to the court. Should the parties be unable to agree upon an arbitrator, the arbitrator shall be chosen by a determination of a court of competent jurisdiction. The arbitration proceedings shall be in English. The arbitrator shall have the authority to award any remedy or relief that a court of the State of New Jersey could order or grant. Each party will perform all acts, including the execution and delivery of further documents, as the arbitrator deems necessary or desirable to confirm and carry out the terms of the award rendered. Judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction thereof. The award rendered by the arbitrator in any arbitration is final and binding on the parties. The arbitration award may be appealed to a court of competent jurisdiction solely on the basis that the award was arbitrary or capricious.
However, notwithstanding the foregoing, either prior to, during or after the arbitration process, any Party to these Terms and Conditions may institute a suit in equity for a temporary injunction (a) to preserve the status quo; (b) to enjoin a breach or threatened breach of this Release; (c) to obtain specific performance; (d) to compel the arbitration or further its purposes and/or to enforce a settlement or award of such arbitration; and/or (e) for any other equitable relief.
The User utilizing the Blog agrees that the laws of the State of New Jersey shall govern these terms and conditions and any dispute, controversy or claim directly or indirectly related to such Use. Further, the User consents to the jurisdiction of the Supreme Court of the State of New Jersey or, if federal jurisdiction exists, at the option of either party, to the jurisdiction of the United States District Court for the District of New Jersey, Newark Vicinage, to seek injunctive relief, compel an arbitration and/or enforce an arbitrator’s award. Any arbitration shall be conducted in Union County, New Jersey. Service of the written notice to initiate the aforementioned arbitration shall be deemed complete when sent either as required by Court procedure or by (i) electronic mail to any of the User’s current or future electronic mail addresses; (ii) ordinary mail or ordinary or two-day mail by a commercial carrier, in the event a regular mailing address has been provided by the party upon which service is being effected or is otherwise determined by the serving party; or (iii) otherwise in accordance with the laws and procedures of the State of New Jersey. The User agrees that regardless of any statute or law to the contrary, any claim or cause of action by User arising out of or related to use of the Blog or services related thereto must be filed within one (1) year after such claim or cause of action arose or be forever barred and therefore the statute of limitations is limited to one (1) year.
The User covenants and agrees to perform further all acts and execute all supplementary instruments or documents which may be requested by the Company to carry out the provisions and effectuate the intent of these Terms and Conditions.
Company may freely assign its rights and obligations in and to these Terms and Conditions. The User acknowledges that it may not assign, transfer or sell its rights under these Terms and Conditions without Company’s express written consent, which may be unreasonably withheld. Any purported assignment without Company’s consent shall be deemed null and void.
If any portion of these Terms and Conditions is ruled invalid or otherwise unenforceable, it shall be deemed amended in order to achieve as closely as possible the same effect as originally drafted. Any invalid or unenforceable portion shall be construed as narrowly as possible in order to give effect to as much of the Terms and Conditions as possible.
Links to Other Sites.
The User acknowledges and agrees that the Company has no responsibility for the accuracy or availability of information provided by websites to which a User may link from the Blog (“Linked Sites”). Links to Linked Sites are provided as a convenience to the User, and do not constitute an endorsement by or association with the Company of such sites or the content, products, advertising or other materials presented on such sites. The Company does not author, edit or monitor these Linked Sites. User acknowledges and agrees that the Company is not responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with use of or reliance on any such content, goods or services available on such Linked Sites. If User accesses a Linked Site, he does so at his own risk.
No Third Party Beneficiaries.
These Terms and Conditions are not intended to be for the benefit of, and shall not be enforceable by any unaffiliated third party, except as may be specifically provided herein. Nothing herein, express or implied, is intended to or shall confer on any third party any rights (including third-party beneficiary rights), remedies, obligations or liabilities under or by reason of these Terms and Conditions or otherwise set forth in the Blog, except as may be specifically provided herein. These Terms and Conditions shall not provide third parties with any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to the terms herein. No third party shall have any right, independent of any right that exists irrespective of these Terms and Conditions, to bring any suit at law or equity for any matter governed by or subject to the provisions herein.
Prohibited by Law.
In the event that any aspect of the Blog or these Terms and Conditions is prohibited by law in User’s jurisdiction, User agrees not to Use the Blog. It is solely User’s responsibility to determine whether it is allowed by law to participate in the Blog. Without limitation, the User releases Company from all liability that could arise from User’s prohibited participation in the Blog or acceptance of these Terms and Conditions. Moreover, and without limiting the indemnification otherwise provided herein, User shall indemnify, defend and hold Company and all Company Parties harmless for any and all damages relating to a violation of this paragraph.
In light of the international scope of the Internet, User agrees to comply with all local laws, rules and regulations, including but not limited to those applicable to online conduct and acceptable Internet content. Without limitation, User acknowledges and agrees that it shall comply with all applicable laws and regulations regarding the transmission of technical data from the United States or the country in which the User may reside.
By his Use of the Blog, the User represents that he has had the opportunity to review these Terms and Conditions with counsel of the User’s choosing, if the User wished to do so. The User further acknowledges that he has thoroughly read these Terms and Conditions; understands that he is giving up certain legal rights that may otherwise exist; has asked any questions he desires to clarify its meaning; and believes it is in his interest to nevertheless proceed with to utilize the Blog.
Please read the following disclaimer which applies to all of the material found on this website:
Nothing contained on this Blog should be construed to create a duty of care, nor to constitute legal advice nor be construed as a representation to be reasonably relied upon. No representations or warranties are made with regard to the accuracy or content of any information contained on any website to which this one may be linked or otherwise refers. Further, none of the material contained herein should be interpreted to state or imply a comparison with the capabilities of any other lawyer or law firm. We take no responsibility for the information contained on any website to which this one may be linked, if any, as the same is completely independent of our own. Neither Nissenbaum Law Group, L.L.C., nor its attorney(s), should be deemed to be retained as counsel unless and until a formal retainer agreement is signed or a retainer letter is received by the prospective client.
ATTORNEY ADVERTISING: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Copyright © 2008 by NISSENBAUM LAW GROUP, LLC. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.
Effective Date: July 2, 2008
Last Updated: July 2, 2008
Revisions to this Policy
The information which the Company collects through the Blog may include personally identifiable information (“Personal Information”) which refers to information that helps it identify users or viewers of the Blog (collectively, “Users” and each a “User”). The Personal Information includes data such as a User’s name, street address, phone number, facsimile number, email address, username and password. The Blog allows Users to submit Personal Information in order to contact or communicate with the Company. If User contacts the Company through this Blog, please note that Personal Information may be maintained by the Blog. Users are responsible for keeping all Personal Information current and may change any previously entered information through the Blog in the manner set forth below.
The Blog may also collect data that cannot be traced back to a specific individual (“Anonymous Information”). For example, the Company may be able to keep count of how many Users have viewed the Blog and specific content therein, or key words utilized to find the Blog, but this information does not necessarily include information regarding Users’ names, street addresses, phone numbers or email addresses. Users who view the Blog but do not enter their Personal Information are generally anonymous Users. Only Anonymous Information and no Personal Information will be intentionally collected by the Company from anonymous Users. The Blog may use browser cookies to collect Anonymous Information. The Blog may also incorporate web beacons or similar tracking technologies to allow the Company to track how the Blog is used. Such technologies are used to collect Anonymous Information, e.g. the name of the User’s internet service provider, the IP address of the User’s computer, User’s browser software and operating system, the identity of any linked-form or linked-to website and other similar information. The Company may combine a User’s Anonymous Information with similar information collected from other Users to help improve the Blog and services.
The Blog is hosted by TypePad.com. Ple/ase contact Typepad.com for information about their policy regarding the collection and retention of User information. Company does not know TypePad’s policies in this regard and makes no representations or warranties regarding TypePad’s use or collection of information about Users. Submitting information via the Internet may not be secure and/or confidential. Users should refrain from sending attorney-client privileged information through the Blog without prior approval from the Company to do so and should thereafter take into account that the Company cannot guarantee that such information will be secure, due to its means of transmission.
Third Party Advertisers and Links to Third Party Websites.
The Company undertakes reasonable efforts to operate secure data networks which are protected by industry standard firewall and password protection systems. The Company undertakes reasonable efforts to review its security and privacy policies on a periodic basis and it may adjust and change the systems as necessary. Notwithstanding the above, and although the Company is ever diligent in its security pursuits, it cannot guarantee the success of its efforts.
It is the Company’s policy to not use or share the Personal Information about the Users of the Blog in ways which have not been outlined or described herein without first allowing its Users a chance to opt out or otherwise disallow such unrelated uses. However, the Company may disclose Personal Information about its Users or information relating to their Use of the Blog for any reason if, in its sole discretion, it determines that it is reasonable to do so, including:
A. To comply with laws, such as the Electronic Communications Privacy Act, regulations or governmental or legal requests for such information;
B. To reveal information that is needed to identify, contact or bring legal action against any User who may be violating the terms and conditions of the Blog;
C. To operate the Blog properly;
D. To protect the Blog and its Users; and/or
E. To fully cooperate with law enforcement authorities, private-party litigants and others seeking information about its Users to the extent required by applicable law.
Managing and Deleting Users’ Personal Information
If a User would like to modify or delete any personal information previously entered on the Blog, he can update his information by sending an email with his current and updated information to firstname.lastname@example.org.
Protection of Children
The Company does not knowingly collect or use any personal information from children (minors younger than 13) through the Blog. If the User is a parent and believes the Company may have inadvertently collected such information from User’s child, please notify the Company immediately by sending an email to email@example.com.
Terms and Conditions
Corporate Transfers of Information
If a person donates a “conditional gift”(a gift that can only be used for the stated purpose) to a charity, may the charity ignore that restriction and use it for another purpose? The Court in Adler v. Save, was confronted with that very issue. In that case, Bernard and Jeanne Adler (the “Adlers”) donated fifty thousand dollars ($50,000.00) (“Donation”) to SAVE (. See Adler v. Save, 432 N.J. Super. 101 (App. Div. 2013) at 111. The Adlers made the Donation to SAVE based upon its representations that the money would be utilized to construct and run a new animal shelter facility (“New Facility”). Unfortunately, after accepting the Donation, SAVE decided that it no longer wanted to build the New Facility. The question presented to the Court was whether SAVE would be required to return the Donation to the Adlers.
SAVE was a charitable organization with a self-proclaimed mission to provide for the rescue, shelter, veterinary care, and adoption of stray companion animals. SAVE was located in the Borough of Princeton, New Jersey (“Princeton”). Id at 105.
Prior to agreeing to make the Donation, SAVE informed the Adlers of the original plans for the New Facility which encompassed the following:
- a large facility approximately thirty-five thousand (35,000) square feet;
- separate living areas for cats and dogs;
- areas designed for isolation and rehabilitation;
- areas for spaying and neutering, including an on-site veterinary clinic with x-ray equipment for treatment and triage of sick and injured animals;
- accommodations for larger dogs, designed as “dog living rooms.”
The Adlers informed SAVE that the purpose for their agreement to make the Donation was “to have rooms for large dogs and older cats that are not easily adopted and specifically for the naming rights for those rooms at that facility [in Princeton].” Id at 113-114. According to Mrs. Adler, SAVE told her that, in recognition and appreciation for the Donation, it would designate two rooms in the New Facility; one for the care of large dogs and the other for the care of older cats. SAVE also told them that the Adlers would have nameplates outside of each of those rooms. Id.
However, after receiving the Donation, SAVE announced to its donors (including the Adlers) that instead of proceeding with its construction of the New Facility, it had decided to merge with another charitable foundation. As a result, SAVE decided that it would not construct its new shelter at its original location in Princeton. Id at 114. The newly formed “merged charity” would transfer all of its operations to a location in Montgomery Township, New Jersey. Id. According to the new plans, SAVE decided to construct a new animal shelter that was significantly smaller than the New Facility and did not include two rooms specifically designated for the long-term care of large dogs and older cats. Id. at 114-120.
As a result of SAVE’s new plans, the Adlers demanded the return of the Donation. Id at 116. SAVE refused. Id. Accordingly, the Adlers filed suit in the Law Division of the Superior Court of New Jersey (“Trial Court”) seeking the return of the Donation. Id at 115. They argued that SAVE violated the material aspect of their gift by deciding, without their knowledge or approval, to use the Donation to construct a facility that did not meet their expressed animal-care conditions and would be located in an area outside of Princeton. Id at 115-116. Accordingly, the Adlers argued that they were entitled to the return of the Donation because it was a conditional gift and SAVE failed to meet its conditions. Id.
The Trial Court confirmed that this was a conditional gift. That means that the gift was one in which the recipient must comply with certain conditions in order to keep it. Normally, if the recipient fails to do so, it must return the gift to the donor upon the donor’s request.
The Trial Court went on to explain that the Donation made by the Adlers was motivated by their desire to provide better conditions for large dogs and older cats. Id at 121. Thus — since SAVE was no longer building a facility that would serve those goals — the Trial Court ruled in favor of the Adlers, finding that they were entitled to the return of the Donation. Id at 120-121.
SAVE appealed to the Appellate Division of the Superior Court of New Jersey (“Appellate Court”). Id at 121. The Appellate Court explained that SAVE was under a fiduciary obligation to return the Donation to the Adlers if it could not meet the conditions they imposed upon it. Specifically, when a donor places trust and confidence in a recipient who is in a dominant or superior position, the recipient assumes a fiduciary duty to the donor. Id at 125. In this case, the Adlers placed their trust in SAVE to meet the conditions of their gift. By virtue of SAVE’s control of the funds, it was required to either meet the Adlers’ conditions or obtain their consent to rededicate the funds to another purpose acceptable to them. Otherwise, SAVE had a fiduciary duty to return the Donation to the Adlers. Id.
In sum, the Appellate Court held in favor of the Adlers based upon the “unquestionable realization” that SAVE accepted the Donation fully aware of the Adlers’ conditions and did not express any reservation to them about SAVE’s ability to meet any of those conditions. Therefore, even though SAVE no longer wanted to build the New Facility, SAVE had to return the Donation to the Adlers since it failed to meet those original conditions. Id at 124.
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