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Matter of Estate of Post, 282 N.J.Super. 59, 659 A.2d 500

Facts

Ray D. Post, a New Jersey resident, died testate on May 5, 1989, leaving behind his third wife, Enid D. Post, and other family members. Enid was dissatisfied with the provisions of the will and sought to recover an elective share under New Jersey law. The estate contested her claim, arguing that her assets exceeded one-third of the augmented estate and raised a marital disqualification defense. A bench trial was held, during which both parties presented evidence regarding the estate's value and Enid's assets.

Ray D. Post (decedent), a New Jersey resident, died testate on May 5, 1989, at the age of ninety. Plaintiff, his third wife, was sixty-five years of age at the time of decedent's death. Decedent was also survived by one son from a previous marriage, two granddaughters, and a grandnephew.

Issue

The main legal issues were whether the 1975 irrevocable trust should be included in the augmented estate, whether a minority discount should apply to the survivor's interest in a closely held corporation, and whether the denial of counsel fees was appropriate.

The estate contends that the trial judge erred in (1) adding to the augmented estate the value of the remainder interest in decedent's 1975 irrevocable trust; (2) refusing to calculate and apply the value of the Brix Trust against plaintiff's elective share; (3) allowing a 50% reduction in the value of plaintiff's share of Post, Inc. stock; (4) relying solely upon Biel's testimony in determining the value of Post, Inc. stock; (5) failing to grant the estate's motion for involuntary dismissal of plaintiff's elective share complaint; (6) not including plaintiff's $10,000 in the amount charged against her elective share; (7) failing to remain fair and impartial; (8) limiting funeral expenses and estate administration costs to $158,000; (9) failing to accept the estate's marital disqualification defense; and (10) failing to award it counsel fees under N.J.S.A. 2A:15–59.1.

Rule

The court applied New Jersey's elective share statute, N.J.S.A. 3B:8–1 to –19, which defines the augmented estate and the conditions under which a surviving spouse is entitled to an elective share.

N.J.S.A. 3B:8–3 defines the augmented estate as: 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, to or for the benefit of any person other than the surviving spouse, 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: a. Any transfer made after May 28, 1980, under which the decedent retained at the time of his death the possession or enjoyment of, or right to income from, the property.

Analysis

The court determined that the 1975 irrevocable trust should not have been included in the augmented estate as it was established before the effective date of the elective share statute. Additionally, the court found that applying a minority discount to the survivor's interest in the closely held corporation was inappropriate in a liquidation context, as all shareholders would receive their pro rata share without discounts.

The court calculated that plaintiff's elective share, one-third of the total augmented estate, was $1,382,963. The court then found the elective share exceeded plaintiff's assets of $1,175,827 by $207,136.

Conclusion

The court affirmed in part and reversed in part the lower court's decision, ultimately concluding that Enid D. Post was not entitled to an elective share as her assets exceeded the required amount.

Affirmed in part and reversed in part.

Who won?

The prevailing party was the estate of Ray D. Post, as the court ruled that Enid D. Post was not entitled to an elective share due to the valuation adjustments made by the court.

The prevailing party was the estate of Ray D. Post, as the court ruled that Enid D. Post was not entitled to an elective share due to the valuation adjustments made by the court.

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