Also known as: nonprobate transfer · non-probate transfers · nonprobate assets · will substitutes
Written by attorneys — see sources below.
A category of assets included in a decedent's augmented estate for elective-share purposes. The category comprises transfers made by the decedent during life or at death that pass outside probate to recipients other than the surviving spouse.
Norman Nash held a joint bank account with his adult son. Norman died first. The probate court values the son's survivorship interest immediately before Norman's death for purposes of calculating the surviving spouse's elective share. The valuation accounts for the fact that Norman predeceased his spouse and excludes any insurance proceeds that would have been treated as the spouse's own nonprobate transfers.
Noah Nakamura named his brother as beneficiary of a life insurance policy. After divorce from his spouse, Noah died without changing the designation. The policy proceeds pass directly to the brother as a nonprobate transfer. The transfer is included in Noah's augmented estate for the former spouse's elective-share claim because it is a lifetime arrangement that shifts value at death outside probate.
Donna Rae Egelhoff was married to David A. Egelhoff. Mr. Egelhoff was employed by the Boeing Company, which provided him with a life insurance policy and a pension plan. Both plans were governed by ERISA, and Mr. Egelhoff designated his wife as the beneficiary under both. In April 1994, the Egelhoffs divorced. Just over two months later, Mr. Egelhoff died intestate following an automobile accident. At that time, Mrs. Egelhoff remained the listed beneficiary under both the life insurance policy and the pension plan. The life insurance proceeds, totaling $46,000, were paid to her. Respondents Samantha and David Egelhoff, Mr. Egelhoff's children by a previous marriage, are his statutory heirs under state law. They sued petitioner in Washington state court to recover the life insurance proceeds. In a separate action, respondents also sued to recover the pension plan benefits. The trial courts, concluding that both the insurance policy and the pension plan "should be administered in accordance" with ERISA, granted summary judgment to petitioner in both cases. The Washington Court of Appeals consolidated the cases and reversed. Applying the statute, it held that respondents were entitled to the proceeds of both the insurance policy and the pension plan. The Supreme Court of Washington affirmed. Courts have disagreed about whether statutes like that of Washington are pre-empted by ERISA. The Supreme Court granted certiorari to resolve the conflict.
View caseThe values of the surviving spouse's fractional and ownership interests are determined immediately before the decedent's death if the decedent was then a joint tenant or co-owner. The property is valued at the decedent's death, taking into account that the decedent predeceased the spouse.
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Proceeds of insurance that would have been included in the surviving spouse's nonprobate transfers to others are not valued as if the spouse were deceased.
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They are added so that the elective-share calculation captures the full value of assets the decedent shifted outside probate to third parties, preventing the decedent from defeating the surviving spouse's statutory share through will substitutes.
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…decree of dissolution or declaration of invalidity.” Wash. Rev. Code § 11.07.010(2)(a) (1994). That statute applies to “all nonprobate assets, wherever situated, held at the time of entry by a superior court of this state of a decree of dissolution of marriage or a declaration of invalidity.” § 11.07.010(1). It defines…