10.9 Augmented Estate

• Library: Estate Planning in Virginia (Virginia CLE) (2022 Ed.)

10.9 AUGMENTED ESTATE

10.901 Statutory Summary.

A. Purpose.

The augmented estate legislation was enacted to eliminate inequities arising out of the former rules of dower and curtesy and renunciation rights of a surviving spouse. The legislation was modeled after the pre-1990 Uniform Probate Code ¹⁸⁶⁵ and took effect January 1, 1991. It was designed to prevent reducing or eliminating the elective or intestate rights of a surviving spouse through the use of probate avoidance arrangements. The legislation was also designed to eliminate a windfall to the surviving spouse who receives substantial nonprobate assets and renounces a decedent's will to further increase his or her share in overall assets passing at the decedent's death, with no accountability to the decedent's other testate takers or intestate heirs. To address the inequities, the legislation eliminated traditional distinctions between real and personal property (focusing on value instead) and included certain pre-death dispositions and nonprobate assets in the overall base of assets for purposes of calculating a surviving spouse's elective share.

In 2016, a new version of the augmented estate statute was passed by the General Assembly that is effective for decedents dying on or after January 1, 2017. The new Act follows the Revised Uniform Probate Code (RUPC) provisions. ¹⁸⁶⁶ Unlike the prior version of the law, the new Act includes the surviving spouse's property and nonprobate transfers to others in the augmented estate. ¹⁸⁶⁷ Furthermore, the family allowance, the right to exempt property, and the homestead allowance are available in addition to the spouse's elective share. ¹⁸⁶⁸

B. Elective Right.

For decedents who died before January 1, 2017, section 64.2-304 of the Virginia Code provides a surviving spouse an elective share in one-third of the decedent's augmented estate if the decedent left surviving children or their descendants, or one-half of the augmented estate if the decedent left no children or their descendants surviving, subject to offset for the value of certain property received by the surviving spouse from the decedent during his or her lifetime and at death.

For decedents dying on or after January 1, 2017, the Virginia augmented estate laws follow the provisions of the Revised Uniform Probate Code (RUPC). The RUPC revisions to the elective share provisions are substantial and alter the theory behind the elective share from one of support to one similar to partnership. Beginning in 2017, the surviving spouse is entitled to take a 50 percent interest in the marital property portion of the augmented estate, which is determined by multiplying the sum of all property included in the augmented estate by a graduated percentage between 3 percent and 100 percent based on the length of the marriage. ¹⁸⁶⁹ The amount is no longer affected by the existence of descendants of the decedent.

The surviving spouse's right does not attach to specific assets but is, rather, a right to a share of the value of the augmented estate itself. The surviving spouse is also entitled to interest at the legal rate specified in section 6.2-301 of the Virginia Code, from the date of the decedent's death to the date of satisfaction of the elective share.

Under the prior act that governs property of decedents dying before January 1, 2017, the tangible personal property exclusion allowed for the possibility of inequities in the case of transfers of tangibles that have significant value, such as jewelry, luxury automobiles, or works of art. The tangibles exclusion is not found in either the UPC or the RUPC. Virginia's adoption of the RUPC version eliminates the tangible personal property exclusion beginning in 2017. ¹⁸⁷⁰ Also beginning in 2017, the augmented estate will include the surviving spouse's property and non-probate transfers to others. ¹⁸⁷¹

C. Procedure.

Under both versions of the augmented estate statute, the election to claim the augmented estate share can be made whether...