Virginia Code 64.2-308.9: Exclusions, valuation, and overlapping application
A. The value of any property is excluded from the decedent‘s non-probate transfers to others:
Terms Used In Virginia Code 64.2-308.9
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Contract: A legal written agreement that becomes binding when signed.
- Decedent: A deceased person.
- Dependent: A person dependent for support upon another.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- in writing: include any representation of words, letters, symbols, numbers, or figures, whether (i) printed or inscribed on a tangible medium or (ii) stored in an electronic or other medium and retrievable in a perceivable form and whether an electronic signature authorized by Chapter 42. See Virginia Code 1-257
- Includes: means includes, but not limited to. See Virginia Code 1-218
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Intestate: Dying without leaving a will.
- Probate: Proving a will
- Property: includes values subject to a beneficiary designation. See Virginia Code 64.2-308.1
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Trustee: means a trustee under a probated will or an inter vivos trust instrument. See Virginia Code 64.2-100
- Trustee: A person or institution holding and administering property in trust.
1. To the extent that the decedent received adequate and full consideration in money or money’s worth for a transfer of the property; or
2. If the property was transferred with the written joinder of, or if the transfer was consented to in writing before or after the transfer by, the surviving spouse.
B. 1. The value of any property otherwise included under § 64.2-308.5, 64.2-308.6, or 64.2-308.7, and its income or proceeds, is excluded from the decedent’s net probate estate, decedent’s non-probate transfers to others, and decedent’s non-probate transfers to the surviving spouse to the extent that such property was transferred to or for the benefit of the decedent, before or during the marriage to the surviving spouse, by gift, will, transfer in trust, intestate succession, or any other method or form of transfer to the extent that it was (i) transferred without full consideration in money or money’s worth from a person other than the surviving spouse and (ii) maintained by the decedent as separate property.
2. The value of any property otherwise included under § 64.2-308.8, and its income or proceeds, is excluded from the surviving spouse’s property and non-probate transfers to others to the extent that such property was transferred to or for the benefit of the surviving spouse, before or during the marriage to the decedent, by gift, will, transfer in trust, intestate succession, or any other method or form of transfer to the extent that it was (i) transferred without full consideration in money or money’s worth from a person other than the decedent and (ii) maintained by the surviving spouse as separate property.
C. The value of property:
1. Included in the augmented estate under § 64.2-308.5, 64.2-308.6, 64.2-308.7, or 64.2-308.8 is reduced in each category by enforceable claims against the included property; and
2. Includes the commuted value of any present or future interest and the commuted value of amounts payable under any trust, life insurance settlement option, annuity contract, public or private pension, disability compensation, death benefit or retirement plan, or any similar arrangement, exclusive of the federal social security system. Except as provided herein for interests passing to a surviving spouse, life estates and remainder interests are valued in the manner prescribed in Chapter 5 of Title 55.1 and deferred payments and estates for years are discounted to present value using the interest rate specified in § 55.1-500. In valuing partial and contingent interests passing to the surviving spouse, and beneficial interests in trust, the following special rules apply:
a. The value of the beneficial interest of a spouse shall be the entire fair market value of any property held in trust if the decedent was the settlor of the trust, if the trust is held for the exclusive benefit of the surviving spouse during the surviving spouse’s lifetime, and if the terms of the trust meet the following requirements:
(1) During the lifetime of the surviving spouse, the trust is controlled by the surviving spouse or one or more trustees who are non-adverse parties;
(2) The trustee shall distribute to or for the benefit of the surviving spouse the entire net income of the trust at least annually;
(3) The trustee is permitted to distribute to or for the benefit of the surviving spouse out of the principal of the trust such amounts and at such times as the trustee, in its discretion, determines for the health, maintenance, and support of the surviving spouse; and
(4) In exercising discretion, the trustee may be authorized or required to take into consideration all other income assets and other means of support available to the surviving spouse.
b. To the extent that the partial or contingent interest is dependent upon the occurrence of any contingency that is not subject to the control of the surviving spouse and that is not subject to valuation by reference to the mortality and annuity tables set forth in §§ 55.1-501 through 55.1-506, the contingency will be conclusively presumed to result in the lowest possible value passing to the surviving spouse.
c. To the extent that the valuation of a partial or contingent interest is dependent upon the life expectancy of the surviving spouse, that life expectancy shall be conclusively presumed to be no less than 10 years, regardless of the actual attained age of the surviving spouse at the decedent’s death.
D. In case of overlapping application to the same property of the subsections or subdivisions of § 64.2-308.6, 64.2-308.7, or 64.2-308.8, the property is included in the augmented estate under the provision yielding the greatest value, and under only one overlapping provision if they all yield the same value.