What is the Spousal Right of Election and how does the Prenuptial Agreement affect it? Estate of Kirk Kerkorian

What is the Spousal Right of Election and how does the Prenuptial Agreement affect it? Estate of Kirk Kerkorian

As a NY Estate litigation lawyer with two decades of experience contesting NY estates I can tell you no two NY will contests are alike. One root cause that can guarantee a NY will contest of your NY estate is the disinheritance of children.  While true that the NY estate law does allow a testator, one who drafts their will, to completely disinherit children it is seldom advisable to do so.  As natural distributees of your estate and your next of kin, there is nothing stopping your very unhappy, disinherited children from contesting your NY estate and thereby exacerbating the probate process indefinitely while increasing NY litigation costs exponentially.   The simplest way to circumvent such a NY will contest is naturally to have your NY estate lawyer include your children in your will to a lesser extent than they would be legally entitled to if you did not have a will or even by bequeathing just a nominal token amount.   Combined with a validly drafted in terrorem clause, no contest clause as they are referred to, this should prevent most children from initiating unwanted NY estate litigation in the future.

Unfortunately disinheriting your spouse from your NY estate is not as simple.  Pursuant to EPTL §5-1.1 of the NY estate law, your surviving spouse may not be disinherited and is entitled to their spousal right of election of one-third any and all gross assets within your NY estate .  As such, EPTL §5-1.1(a)(e)(2) does not permit spouses to completely disinherit each other in their NY estates absent a validly executed contract waiving said right of election in the form of prenuptial or postnuptial agreements. This is the unique area of law where the NY estate law intersects with Domestic Relations Law §236(b)(3) permitting prenuptial agreements to circumvent the spousal right of election for inheritance purposes.  Therefore, as recently stated by the New York State Appellate Court in Matter of Koegel, 160 A.D.3d 11 (2ndDept. 2018), absent such a validly executed agreement waiving the spousal right of inheritance, a surviving spouse is entitled to one-third of all assets in their spouse’s gross estate.   

Estate of Kirk Kerkorian

At 98 years of age, Kirk Kerkorian was one of the most successful investors in the United States.  On June 15, 2015, Kerkorian had a net wealth of nearly $2 billion dollars when he died.  Kerkorian’s Beverly Hills private holding company maintained significant stakes in Las Vegas’s MGM Mirage hotel and gaming conglomerate as well as myriad other successful entertainment companies.  In March of 2014, at the age of 94, Kerkorian decided to try his luck for the fourth time at marriage with fourth wife, 64 year-old retied tennis player, Una Davis. To prevent any nasty litigation of his estate, Kerkorian who was a savvy businessman, had Davis sign a prenuptial agreement the day before their wedding.  Pursuant to their prenuptial agreement, Davis agreed to waive her one-third interest or seven hundred million dollar spousal right of election in Kerkorian’s estate, should he pass.   In exchange for executing said prenuptial agreement, Davis was guaranteed a lump sum payout of $10 million dollars in the event of Kerkorian’s passing.  

Predictably the Kerkorian marriage to Una Davis lasted 57 days before Kerkorian had her removed from his residence.  Divorce proceedings were pending at the time of the billionaire’s death.  Despite having waived her spousal right of election in her billionaire husband’s estate Una Davis proceeded to hire an estate litigator to assert her same spousal right of election she previously agreed to waive.   As such, estate lawyers for Davis contested Kerkorian’s will asserting her entitlement to Davis’s $700 million dollar spousal right of election rather than the mere $10 million dollars afforded Davis within the prenuptial contract.  Estate litigators for Davis argued that she did not fully understand the details of the prenuptial agreement when she executed it and only signed the document under undue influence the day before her wedding to appease her husband’s attorneys.  As a NY estate litigator with invaluable experience contesting NY wills I can tell you that neither of these arguments would stand up to the terms of a properly executed prenuptial agreement in Court.  Therefore, it is not surprising that estate attorneys for Una Davis recently agreed to settle this matter for $12.5 million dollars with Kerkorian’s estate. The settlement amount is $2.5 million dollars in excess of what Davis initially agreed to in the prenuptial agreement and should just about cover her legal expenses associated with this will contest.  

If you think you or a loved one may have been wrongly excluded from a loved one’s will it never hurts to ask the opinion of an experienced NYC will contest lawyer to see what rights you may have under the NYC estate law.  Feel free to call the knowledgeable NYC estate lawyers at The Law Offices of Jason W. Stern & Associates for a free consultation at (718) 261-2444. Our Queens estate lawyers have 50 years of combined NYC estate law experience drafting, probating and challenging wills for families like yours in the counties of Queens, New York, Kings, Bronx, Westchester, Richmond, Rockland, Nassau, Orange, Dutchess as well as in the State of New Jersey.