2017 Changes in Virginia's Elective Share Determination

Effective January 1, 2017, Virginia has made some significant changes to its probate laws, which could drastically affect the amount of your estate that will pass to your spouse upon your death if you die without a will. If a married spouse dies without a will, or does not leave anything under a will to the surviving spouse, Virginia law allows the surviving spouse to claim a right to an “elective share,” in lieu of the share given to the spouse under a will. This share is a portion of the pool of property called the “augmented estate.” An augmented estate is the sum of the net probate estate, property that the decedent transferred to third parties (i.e., not the spouse), and property of the surviving spouse derived from the decedent. The augmented estate does not include transfers that both spouses consented to, or property which it separate property of each spouse.

Virginia Probate Divorce Laws

Under Section 64.2-302 of the 1950 Code of Virginia, as amended, the surviving spouse can claim an elective share under these scenarios. Before January 1, 2017, the elective share could be either 1/3 or 1/2 of the augmented estate. See Section 64.2-304 of the 1950 Code of Virginia. If the decedent (spouse who died) left children or other descendants, then the surviving spouse is typically entitled to 1/3 of the augmented estate. If there are no surviving children, then the spouse can typically elect to inherit 1/2 of the augmented estate.

In 2017 this amount is going to be determined by the “marital property portion.” A spouse will be entitled to claim 1/2 of the marital property portion of the augmented estate. This marital property portion is equal to the value of the augmented estate multiplied by a percentage that increases based on how long the decedent and the surviving spouse were married to each other.

You can review the full Bill here: https://lis.virginia.gov/cgi-bin/legp604.exe?161+ful+CHAP0187

For your convenience, you can refer to the respective percentages as a quick guidance:

  1. Less than one year: 3%
  2. One year but less than two years: 6%
  3. Two years but less than three years: 12%
  4. Three years but less than four years: 18%
  5. Four years but less than five years: 24%
  6. Five years but less than six years: 30%
  7. Six years but less than seven years: 36%
  8. Seven years but less than eight years: 42%
  9. Eight years but less than nine years: 48%
  10. Nine years but less than ten years: 54%
  11. Ten years but less than eleven years: 60%
  12. Eleven years but less than twelve years: 68%
  13. Twelve years but less than thirteen years: 76%
  14. Thirteen years but less than fourteen years: 84%
  15. Fourteen years but less than fifteen years: 92%
  16. Fifteen years or more: 100%

Some useful examples should help illustrate this complicated area of law.

Example: Imagine Harry and Wanda have been married for 15 years. Harry dies, leaving a net probate estate of $800,000 but leaving nothing to Wanda by will. Homer and his business partner own a commercial property as joint tenants with a right of survivorship. Harry’s share of the property is worth $400,000. Harry made no non-probate transfers to Wanda. Wanda’s assets consist primarily of the house she lived in with Harry, which is worth $1,000,000 and is titled in Wendy’s name only.

The augmented estate is the sum of Harry’s net probate estate, Harry’s non-probate transfers to others, Harry’s non-probate transfers to Wanda, and Wanda’s net assets and non-probate transfers to others. Therefore, Harry’s augmented estate is $2.2 million ($800,000 + $400,000 + $0 + $1,000,000). Because Harry and Wanda were married for 15 years, the marital-property portion of the augmented estate is 100%, or $2.2 million. Wanda’s elective share is one-half of this amount, or $1.1 million. The marital-property portion of the value of Wanda’s house (100% of $1,000,000) will be applied to satisfy the elective share, reducing the unsatisfied balance to $100,000 ($1.1 million – $1 million). Next, the probate and non-probate transfers Wanda received from Harry would typically be applied but in this case, there are none. Therefore, the remaining $100,000 will be taken pro rata from Harry’s probate and non-probate transfers.

Example: Using the same facts as above, but Harry and Wanda were married for less than one year. The augmented estate is still $2.2 million, but the marital-property portion of the augmented estate is now only 3%, or $66,000 ($2.2 million × 0.03 = $66,000). Wanda’s elective share is one-half this amount, or $33,000. The marital-property portion of the value of Wanda’s house (3% of $1,000,000, or $30,000) will be applied in partial satisfaction of the elective share, reducing the unsatisfied balance to $36,000.

If the elective share is smaller than 1/2 of the marital property portion the spouse will recive nothing.

Example: Harry and Wanda have been married for 15 years. Harry dies, leaving a net probate estate of $500,000 but leaving nothing to Wanda by will. Harry has a $200,000 life insurance policy naming his sister as beneficiary. Homer made no non-probate transfers to Wanda. Wanda is the sole owner of the $700,000 home she lived in with Harry. Wanda and her brother own an $800,000 vacation home as joint tenants with a right of survivorship.

Here, Wanda’s assets and non-probate transfers to others is $1.1 million. This includes her house ($700,000) and her share of the vacation home (one-half of $800,000, or $400,000) because if Wanda had died instead of Harry, the vacation would have passed by non-probate transfer to Wanda’s brother rather than to Harry. Therefore, Harry’s augmented estate is $1.8 million ($500,000 + $200,000 + $0 + $1,100,000). Because Harry and Wanda were married for 15 years, the marital-property portion of the augmented estate is 100%, or $1.8 million. Wendy’s elective share is one-half of this amount, or $900,000. The marital-property portion of Wanda’s assets (100% of $1.1 million) is sufficient to satisfy the elective share. Therefore, Wanda has no claim to Harry’s probate estate or non-probate transfers.

These examples are simplistic. In reality the calculations can be much more complex due to the high number of variables involved. It is highly recommended that you work with an attorney and an accountant if you ever find yourself in this position.

Virginia Family Law Attorneys

Contact Keithley Law, PLLC today by calling (703) 454-5147 and schedule a reduced-fee, initial consultation in our Fairfax law office with one of our Virginia Family Law attorneys. We can walk you through the steps to establish paternity to collect child support or to ensure that you, as a Father, have visitation and custodial rights to your child.

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