Title: Sexton v. Cornett
Citation: N/A
Docket Number: 050643
State: Virginia
Issuer: Virginia Supreme Court
Date: January 13, 2006

Present:  Hassell, C.J., Lacy, Keenan, Koontz, Kinser, and 
Agee, JJ., and Russell, S.J. 
 
CHRISTIE COLTRANE SEXTON 
             OPINION BY 
SENIOR JUSTICE CHARLES S. RUSSELL 
v.  Record No. 050643                January 13, 2006 
 
VIRGINIA CORNETT, ET AL. 
 
FROM THE CIRCUIT COURT OF WYTHE COUNTY 
J. Colin Campbell, Judge 
 
 
This appeal involves the interplay between two statutory 
schemes, the laws providing for a surviving spouse’s right to 
claim an elective share in a deceased spouse’s augmented 
estate, Code §§ 64.1-13 through 64.1-16.4, (the augmented 
estate laws) on one hand, and the laws exempting certain life 
insurance proceeds and vested retirement benefits from legal 
process, Code §§ 51.1-124.4, 51.1-510 and 38.2-3339 (the 
exemption laws) on the other. 
Facts and Proceedings 
 
The parties submitted a stipulation of facts to the trial 
court.  James Dean Sexton died intestate on August 31, 2003.  
He had been employed by the police department of the Town of 
Wytheville and by virtue of his employment was entitled to 
group life insurance administered by the Virginia Retirement 
System (VRS).  He also had vested retirement benefits 
administered by VRS.  At the time of his death, the value of 
his VRS life insurance was $68,392.88 and his VRS retirement 
 
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benefits amounted to $27,394.60.  His estate contained no 
other assets. 
 
Sexton had no children.  He was survived by his wife, 
Christie Coltrane Sexton (the widow).  They had separated 
before his death and divorce proceedings were pending between 
them.  Sexton had designated his wife as the beneficiary of 
his VRS life insurance and retirement benefits in 1994.  He 
executed new VRS forms two months before his death, however, 
designating his sister, Virginia S. Cornett and her infant 
daughter, Lolly M. Cornett, (the beneficiaries) sole 
beneficiaries of his VRS life insurance and retirement 
benefits. 
 
After Sexton’s death, his widow filed a petition for a 
determination of her elective share in his augmented estate, 
naming the beneficiaries as defendants.  The petition claimed 
that the life insurance proceeds and retirement benefits 
should be included in the augmented estate of the decedent and 
that the widow should be allowed one-half thereof as her 
elective share.  The trial court appointed a guardian ad litem 
to represent the interests of the infant defendant. 
 
Upon the stipulated facts and exhibits, the trial court, 
in a letter opinion, ruled that the value of the life 
insurance proceeds and the value of the retirement benefits 
should be added to the augmented estate pursuant to Code 
 
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§ 64.1-16.1, but that nevertheless, that section “does not 
bring the actual benefits and life insurance proceeds into the 
estate.”  Noting that the proceeds of group life insurance 
policies are exempted by Code § 38.2-3339 from application “by 
any legal or equitable process or operation of law” to any 
debt or liability of any person who has a right under the 
policy, the trial court held that the insurance proceeds and 
retirement benefits were not a part of the augmented estate 
and that the widow had no claim upon them.  Because Sexton's 
estate had not been made a party to the suit, the trial court 
held that it had no jurisdiction to enter any orders except to 
rule upon the widow’s claim to the insurance and retirement 
benefits.  We awarded the widow an appeal. 
Analysis 
 
The General Assembly, in 1990, revised the former laws 
relating to wills and decedent’s estates to provide a new 
system of augmented estates in lieu of the former system of 
dower and curtesy rights, effective January 1, 1991.  1990 
Acts, ch. 831.  The new system was designed to preclude one 
spouse from disinheriting the other by transferring his 
property to third parties during his lifetime and thus 
depleting his estate, Chappell v. Perkins, 266 Va. 413, 421, 
587 S.E.2d 584, 588 (2003), a feat easily accomplished at 
common law, Gentry v. Bailey, 47 Va. (6 Gratt.) 594 (1850). 
 
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Under the new system, the value of any property having an 
aggregate value exceeding $10,000 transferred to or for the 
benefit of a donee by the decedent within the calendar year of 
his death, or within any of the five preceding calendar years, 
is to be included in the augmented estate.  Code § 64.1-
16.1(A)(3)(d).  Further, persons such as the beneficiaries who 
are "original transferees from or appointees of the decedent" 
are "subject to contribution to make up the elective share of 
the surviving spouse," § 64.1-16.2(c), although the surviving 
spouse's right can be waived.  Dowling v. Rowan, 270 Va. 510, 
517-18, 621 S.E.2d 397, 400-01 (2005). 
 
When the decedent is not survived by children or their 
descendants, the surviving spouse is entitled to one-half of 
the augmented estate.  Code § 64.1-16.  The designation of a 
person as beneficiary under a life insurance policy is a gift 
from the insured, even though the gift is revocable and its 
enjoyment is postponed.  Walker v. Penick, 122 Va. 664, 672, 
95 S.E. 428, 431 (1918).  The same reasoning applies to a 
designation of a person as beneficiary of vested retirement 
benefits.  Thus, if the augmented estate laws are read in 
isolation, the assets held by these beneficiaries, as donees 
of the decedent’s property within the year prior to his death, 
are clearly subject to the widow’s claim. 
 
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On the other hand, the General Assembly has, for many 
years, maintained a legislative policy of exempting VRS life 
insurance proceeds and retirement benefits, in the hands of 
their designated beneficiaries, from attack of any kind.  Code 
§ 51.1-510, pertaining to VRS life insurance, provides in 
pertinent part:  “[T]he insurance provided for in this 
chapter, including any optional insurance, and all proceeds 
therefrom shall be exempt from levy, garnishment, and other 
legal process.”  Code § 51.1-124.4, pertaining to VRS 
retirement benefits, provides in pertinent part:  “Retirement 
allowances and other benefits accrued or accruing to any 
person under this title . . . shall not be subject to 
execution, attachment, garnishment, or any other process 
whatsoever . . . .”  Code § 38.2-3339, pertaining to group 
life insurance generally, provides: 
 
§ 38.2-3339. Exemption of group life insurance 
policies from legal process. – No group life 
insurance policy, nor its proceeds, shall be liable 
to attachment, garnishment, or other process, or to 
be seized, taken, appropriated, or applied by any 
legal or equitable process or operation of law, to 
pay any debt or liability of any person insured 
under the policy, or his beneficiary, or any other 
person who has a right under the policy, either 
before or after payment.  If the proceeds of a group 
life insurance policy are not made payable to a 
named beneficiary, the proceeds shall not constitute 
a part of the insured person's estate for the 
payment of his debts. 
 
 
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The foregoing provisions have been a part of the law of 
Virginia since 1960, 1952, and 1934, respectively. 
Undoubtedly, much legal advice has been given and many estate 
plans have been made in reliance upon them.  The question 
before us is whether they were partially repealed by 
implication when the augmented estate laws were enacted in 
1990. 
 
The widow argues that the two statutory schemes are not 
necessarily in conflict because the augmented estate laws do 
not require that the beneficiaries pay into the estate for her 
benefit the particular assets covered by the exemption 
statutes.  After the augmented estate has been increased by 
the “value” of the exempt assets, the widow contends, the 
beneficiaries may instead satisfy her claim by transferring to 
her other assets of equal value, subject to the court’s 
approval, citing Code § 64.1-16.2(E).  We do not agree.  Such 
a circular process would effectively nullify the exemption 
laws and would require a court to accomplish by indirection 
the very result those laws were designed to prevent.  We do 
not attribute to the General Assembly the intention to create 
such an anomaly.  The exemption statutes either apply or they 
do not.  If they do not, it is because they were partially 
repealed by implication through the enactment of the augmented 
estate laws in 1990. 
 
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The implied repeal of an earlier statute by a later 
enactment is not favored.  There is a presumption against a 
legislative intent to repeal where the later statute does not 
amend the former or refer expressly to it.  Albemarle County 
v. Marshall, 215 Va. 756, 761, 214 S.E.2d 146, 150 (1975).  
The courts assume that a legislative body, when enacting new 
legislation, was aware of existing laws pertaining to the same 
subject matter and intended to leave them undisturbed.  
Otherwise, the older laws would have been amended or expressly 
repealed.  Consequently, when two statutes are in apparent 
conflict, it is the duty of the court, if reasonably possible, 
to give them such a construction as will give force and effect 
to each.  Scott v. Lichford, 164 Va. 419, 422-23, 180 S.E. 
393, 394 (1935). 
 
We adhere to a rule of construction that where there are 
two statutes, the earlier special and the later general, and 
the terms of the general are broad enough to include the 
subject matter provided for in the special, a presumption 
arises that the earlier special act is to be considered as 
remaining in effect as an exception to the later general law. 
Id. at 424, 180 S.E. at 395; see Crawford v. Haddock, 270 Va. 
524, 528, 621 S.E.2d 127, 129 (2005).  The exemption laws are 
statutes of special application, in the sense that they apply 
only to specific and narrowly defined subject matter.  The 
 
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augmented estate laws, by contrast, are broad and sweeping in 
their application to nearly all conceivable species of 
property rights. 
Conclusion 
 
Applying the foregoing rules of statutory construction, 
we hold that the exemption laws remain in effect as exceptions 
to the application of the augmented estate laws.  It follows 
that the rights of the beneficiaries to the proceeds of the 
decedent’s VRS life insurance and retirement benefits are 
unaffected by the augmented estate laws, that those exempt 
assets did not become a part of the augmented estate, that 
their value should not be added to it, and that the 
beneficiaries are not subject to any claims for contribution.  
Although we do not agree with the reasoning expressed by the 
trial court in reaching its decision, its holding was correct 
and we will affirm the judgment. 
Affirmed.