A common example that is often encountered when counseling clients about their estate planning needs: Al, 55, and Betty, 53, currently live in New Jersey and were recently married for the second time. Each has three kids from a prior marriage. Both are considered established individuals who have had significant careers resulting in substantial retirement assets, such as 401(k) plans and IRAs. Al and Betty continue to keep their own assets, including inheritances, in separate accounts. When asked how assets should be distributed in the event of death, they have both expressed that their individual assets transfer to their kids and grandchildren. What should an estate practitioner consider so that Al and Betty's wishes are effectuated? How should an estate practitioner counsel their clients? 

Everything You and Your Clients Wanted to Know About the Elective Share Statute

As a preliminary matter, I will not be addressing the issue of retainer agreements or conflict of interest waivers. However, both are important, especially when providing advice to a married couple. From a practical perspective, it is imperative that Al and Betty are aware and familiar with the phrase "elective share," as this phrase often elicits a blank stare. In common law title states like New Jersey, individuals may dispose of property as they wish at death. This is contrary to community property states. See Restatement (Third) of Prop.: Wills and Other Donative Transfers § 9.1 (Am. Law Inst. 2003). It is important to know which states are community property states because if a couple moves from a community property state to a common law state, each spouse retains a one-half interest in property accumulated during marriage while they lived in the community property state. As such, it is important to inquire as to whether Al or Betty ever lived in a community property state during their marriage since property rights may be impacted.