                                 CODE OF VIRGINIA

APPORTIONMENT REQUIRED (§ 64.2-540)

A. Except as provided in subsection B, whenever it appears upon any settlement
of accounts or in any other appropriate action or proceeding that an executor,
administrator, curator, trustee, or other person acting in a fiduciary capacity
has paid an estate tax levied or assessed under the provisions of any estate tax
law of the Commonwealth, any other state, or the United States, upon or with
respect to any property required to be included in the gross estate of a
decedent under the provisions of any such law, the amount of the tax so paid,
together with any interest and penalty required by the taxing authority to be
paid, shall be prorated among the persons interested in the estate to whom such
property is or may be transferred or to whom any benefit accrues. Such
apportionment shall be made in the proportion that the value of the property,
interest, or benefit of each such person bears to the total value of the
property, interests, and benefits received by all such persons interested in the
estate. However, in making such proration each person shall have the benefit of
any exemptions, deductions, and exclusions allowed by law in respect of the
person or the property passing to him, and where a trust is created or other
provision is made giving a person an interest in income, an estate for years, an
estate for life, or any other temporary interest or estate in any property or
fund, the tax on such temporary interest or estate shall be charged against and
paid out of the corpus of such property or fund without apportionment between
the temporary interests or estates and any remainder interests, and any interest
and penalty required by the taxing authority to be paid may be charged against
either the temporary interest, estate, or corpus, or partially against the
temporary interest, estate, or corpus, as determined by the fiduciary paying the
tax, provided that the determination is made so as to fairly balance all
interests in the property or fund.

B. The amount of tax paid upon or with respect to property included in the
decedent&#8217;s gross estate under &#xA7; 2044 of the Internal Revenue Code, as
amended, or any successor provision relating to certain property for which the
marital deduction was previously allowed, shall be the excess of (i) the total
estate tax levied or assessed under the provisions of the estate tax laws of the
Commonwealth, any other state, and the United States over (ii) the estate tax
that would have been levied or assessed under those provisions if the &#xA7;
2044 property had not been included in the gross estate. The tax paid upon or
with respect to the &#xA7; 2044 property shall be prorated according to
subsection A as if no other estate tax were payable under the laws of the
Commonwealth, any other state, and the United States, and as if the &#xA7; 2044
property constituted the entire gross estate; but it shall be prorated only
among the persons interested in the estate to whom such property is or may be
transferred or to whom any benefit of such property accrues. The tax determined
under clause (ii) shall be prorated according to subsection A as if no other
estate tax were payable under the laws of the Commonwealth, any other state, and
the United States, and as if the &#xA7; 2044 property were not included in the
gross estate. This subsection shall apply only to estates of persons dying on or
after July 1, 1986.

C. The personal representative of an estate which for tax purposes includes
&#xA7; 2044 property owes a duty of good faith and fair dealing to all persons
interested in the estate to whom or for whom the &#xA7; 2044 property may be
transferred or held. The duty of good faith includes a duty to keep such persons
or their designated representative reasonably informed as to the contents of the
returns to be filed and as to all administrative and judicial proceedings that
concern the taxes to be paid with respect to the &#xA7; 2044 property, and to
provide copies of the relevant portions of all returns to be filed with respect
to such taxes. The designated representative of such persons shall be invited to
attend any administrative conference or proceeding where valuation issues may be
discussed that would have a bearing on the taxes to be paid with respect to the
&#xA7; 2044 property. This subsection shall apply only to estates of persons for
which a federal estate tax return is required to be filed on or after July 1,
1994.

HISTORY: Code 1950, § 64-151; 1952, c. 294; 1954, c. 664; 1968, c. 656, §
64.1-161; 1979, c. 559; 1986, c. 399; 1994, c. 917; 1997, c. 254; 2012, c. 614.