Saturday, May 15, 2021
I have long been perplexed by the inconsistency between the rights of divorcing spouses which are governed by family law rules and the rights of surviving spouses which are governed by trusts and estates law. While the rules governing the distribution of property at divorce and the elective share right both claim to reflect a partnership theory of marriage, Naomi Cahn’s article, What’s Wrong About the Elective Share “Right”?, demonstrates that the elective share does not further a partnership theory, at least not in cases involving subsequent marriages, and further fails to recognize and adequately balance the interests of multiple families.
Cahn analyzed all of the elective share cases from January 2014 though January 2019 available on Westlaw and Lexis. Although the number of cases was relatively small (71 cases), the results are illuminating. First, they suggest that the overwhelming majority of surviving spouses who seek an elective share are women. Seventy-eight percent (56/71) of the claimants in Cahn’s study were women. This is not surprising because, as Cahn explains, women tend to live longer than men and to marry men who are older than they, especially in subsequent marriages (marriages other than first marriages). I was, however, intrigued by Cahn’s findings that the typical elective share case pits a stepmother against her stepchildren, or, more precisely, against her former stepchildren. Eighty percent of the cases in Cahn’s study involve subsequent spouses who challenged a will that left most of the property to the decedent’s children from a prior relationship.
In addition to its empirical findings, the article reveals the problems with including non-marital property—which is not available for distribution at divorce in the majority of states—is the augmented estate used to calculate to the elective share. Cahn demonstrates that by including non-marital property in the augmented estate, trusts and estates law strays from the conception of marriage as a partnership. After all, if decedent acquired particular property before the marriage and the surviving spouse never had the opportunity to make any contributions to its acquisition or maintenance, then the property is not the result of marital efforts—it is not the result of a partnership. Thus, the rationale for the elective share would appear to depend on its original purpose—to provide support for needy wives—rather than the partnership rationale.
Cahn’s conclusions are nuanced. She acknowledges that in first marriages, especially those of long duration, the elective share likely reflects and furthers the notion of marriage as a partnership. She explains that in those marriages, especially if the couple raised children together, each spouse might have assumed a different role in the marriage which impacted their earnings during the marriage as well as their earning capacity. The surviving spouse in those cases, who is typically a woman and has fewer assets for retirement, is the traditional claimant that many, if not most, would agree should benefit from the elective share.
In contrast, Cahn demonstrates, these justifications for the elective share are less likely to be present in subsequent marriages, especially in later-in-life marriages where there are no young children that need caretaking, and where the spouses bring with them economic and human capital that they may have built in an earlier marriage with another partner. Although Cahn does not put it quite so bluntly, I quickly came to the conclusion that the subsequent spouse who is seeking an elective share may stand to benefit from the investments and sacrifices made by the decedent’s prior spouse(s) to the detriment of decedent’s children from a prior family. Thus, the elective share may result in a windfall to the subsequent spouse.
Read more here.