By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Estate and Probate Attorney
Come Christmas or Holidays we all make and exchange gifts. We never think twice about whether a gift is a legal gift or not. In our mind it’s just a gift. End of discussion. But, sometimes it’s not so simple. Recently a New Jersey appeals court ruled that a surviving spouse failed to prove that her deceased spouse made an enforceable gift based on the deceased spouse’s failure to deliver the gift during his life time to the survivor.
In this case the giver of the “gift” who was married for 41 years before he remarried, died 5 years later at the age of 84.
Before their marriage, the parties entered into a pre-nuptial agreement in which each agreed to maintain sole ownership of all their respective property. However, the agreement did allow each spouse to transfer property to each other during the marriage.
Prior to marrying plaintiff, the decedent entered into an “Agreement to sell a Development Easement” to the State of New Jersey consisting of a 142-acre farm for $20,000 per acre. The final total price for the purchase of the development rights was in excess of $2.7million dollars.
His new spouse was never a party to the agreement. However, the title insurance company required that she sign the deed for conveyance of the development rights and the affidavit of title because the martial residence was located on the farmland, although the area where the home was located was not included in the easement. Under New Jersey law, as a spouse she has a right of joint possession to the marital home as long as both spouses are alive.
Soon after her spouse’s death, the wife filed an order to show cause and complaint against her husband’s estate, seeking to obtain one-half of the proceeds from the post-marital sale of development rights to the 142-acre farm. She claimed the sales proceeds stemmed from an alleged gift made by her late spouse to her of one-half of the sales proceeds. The gift was allegedly evidenced by her participation in the signing of the documents required by the title insurance company. In response, the estate filed a motion for summary judgment, and his two children filed a motion to dismiss for failure to state a claim.
The trial court found that the surviving spouse was required to prove the elements of an enforceable, inter vivos gift by evidence that was “clear, cogent, and persuasive.” The elements needed to prove a gift from a decedent are: (1) an unequivocal donative intent on the part of the donor; (2) an actual or symbolic delivery of the subject matter of the gifts; and (3) an absolute and irrevocable relinquishment by the donor of ownership and dominion over the subject matter of the gift. The trial court found that she failed to prove the elements of a gift, and therefore granted summary judgment in favor of the estate of her deceased spouse.
So, what to take out of this case. Simply, even gifts are not always what they appear to be.
To discuss your NJ Estate and Probate matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at email@example.com. Please ask us about our video conferencing consultations if you are unable to come to our office.