                                 CODE OF VIRGINIA

EXCLUSIONS, VALUATION, AND OVERLAPPING APPLICATION (§ 64.2-308.9)

A. The value of any property is excluded from the decedent&#8217;s non-probate
transfers to others:

   1. To the extent that the decedent received adequate and full consideration in
   money or money&#8217;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&#8217;s net probate estate, decedent&#8217;s non-probate transfers to
others, and decedent&#8217;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&#8217;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 &#xA7; 64.2-308.8, and
   its income or proceeds, is excluded from the surviving spouse&#8217;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&#8217;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 &#xA7; 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 (§ 55.1-500 et seq.) 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&#8217;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 &#xA7;&#xA7; 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&#8217;s death.

D. In case of overlapping application to the same property of the subsections or
subdivisions of &#xA7; 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.

HISTORY: 2016, cc. 187, 269; 2018, c. 301.