Family Court, Estate Administration or Estate Litigation?

New Bill Provides Guidance for Family Members and Other Beneficiaries of a Decedent's Estate in Cases Where the Decedent Dies Prior to the Conclusion of Divorce Proceedings

The “Black Hole Doctrine” [What happens to marital property when a spouse or civil union partner dies while a divorce matter is pending?] has finally been closed and the ability for a surviving spouse to inherit assets from his or her deceased spouse or civil union partner no longer exists if a divorce was pending. The law now permits (effective January 8, 2024) the distribution of property when a divorce is pending, and a spouse or civil union partner dies prior to the divorce being finalized. It also prevents the surviving spouse or partner from inheriting assets from his or her deceased spouse or partner if there was a divorce pending at the time of his or her death.

On January 8, 2024, Bill A2351 (the “Bill”) was passed into law (P.L. 2023, c.238.). The Bill amends the Equitable Distribution Statute, N.J.S.A. 2A:34-23(h), and authorizes the Superior Court, Family Part to effectuate equitable distribution when a Complaint for Divorce or dissolution of civil union has been filed and either party has died prior to the entry of a Final Judgment. Similarly, the Bill provides that when a Complaint for Divorce or dissolution of civil union has been filed and either party has died prior to the entry of a Final Judgment, the surviving spouse will no longer be eligible to receive an intestate or elective share of the decedent’s estate.

Equitable distribution is the mechanism for the division of the marital estate between spouses or civil union partners in connection with a divorce action. The Bill amends a portion of the Equitable Distribution Statute and provides the following new subsection:

If a complaint not dismissed pursuant to R.4:6-2 of the Rules of Court has been filed for an action under paragraph (1) of this section, and (a) either party to the litigation dies prior to the entry of the final judgment, or (b) if the parties had and remained entered into a validly executed equitable distribution cut-off agreement, termination agreement, or marital settlement agreement where the underlying subject matter of the agreement is divorce, dissolution of civil union, termination of domestic partnership, or divorce from bed and board at the time of death of the decedent occurring prior to the entry of the final judgment, the court's authority to effectuate an equitable distribution of the property shall not abate. Pursuant to subparagraph (a)(3) of R.4:3-1 of the Rules of Court, all such matters shall be filed and heard in the Family Part of the Chancery Division of the Superior Court

As the death of spouse terminates a pending divorce action, prior to the passing of the Bill, there was a lack of clarity as to a surviving spouse’s ability to obtain relief such as equitable distribution should the other party die after a Complaint for Divorce is filed but prior to the entry of a Judgment of Divorce.

The New Jersey Supreme Court was faced with this issue in Carr v. Carr, 120 N.J. 336 (1990). There, despite the termination of the divorce action due to the death of the husband, which occurred subsequent to the filing of the Complaint for Divorce but prior to the entry of a Final Judgment, it was held that in such cases the surviving spouse is permitted to pursue “equitable relief” so as to prevent the decedent’s estate – which in Carr was the husband’s estate – from being unjustly enriched.

Since Carr, there has been much uncertainty in both the areas of estate administration and matrimonial law as to the mechanics and procedures for obtaining relief for surviving spouses, family members, and any other potential third-party beneficiaries of a decedent’s estate. Practitioners who find themselves in these cases often refer to the litigation as a “black hole.” In what certainly is an unintentionally poetic fashion, the Bill finally provides closure for surviving spouses, family members, and other beneficiaries of a decedent’s estate, making clear that equitable distribution is available so long as the Complaint for Divorce has not been dismissed prior to the death of the decedent.