Opinion ID: 1057830
Heading Depth: 1
Heading Rank: 1

Heading: revelant facts and proceedings 1

Text: In 2010, Grace died and was survived by her husband, Lloyd, their two adopted children, and Henry B. Webb (Henry), her son 1 The facts and proceedings are set forth in a written statement of facts filed pursuant to Rule 5:11(e). from a previous marriage. In her will, which was probated in the Prince Edward County Circuit Court Clerk's Office, Grace named Henry as the executor of her estate, and devised and bequeathed her entire estate to him. 2 Lloyd timely filed a claim for an elective share in Grace's augmented estate pursuant to Code § 64.1-13. Subsequently, Henry filed a complaint in the circuit court, naming Lloyd as a defendant and seeking, among other things, a determination of the value of Lloyd's elective share in Grace's augmented estate. 3 The circuit court, sitting as the trier of fact, heard evidence regarding Grace's estate. In 2005, Lloyd and Grace sold their jointly owned real property located in Chesterfield County and deposited the sale proceeds of $118,000 into their joint checking account. After using a portion of the proceeds to pay jointly owed debts, Lloyd executed two checks drawn on the joint checking account, each in the amount of $41,750. One check was payable to Lloyd, and the other check was payable to Grace. Lloyd never cashed his check, and his $41,750 remained in the joint checking account. Grace, however, used the 2 Grace excluded Lloyd and her adopted children from inheriting anything under her will. 3 A petition to establish the amount of an elective share may be filed by a surviving spouse, a decedent's personal representative, or any party in interest. Code § 64.1-16.2(D); Chappell v. Perkins, 266 Va. 413, 418, 587 S.E.2d 584, 587 (2003). 2 proceeds from her check to obtain two cashier's checks, each issued in the amount of $20,875 and payable to Henry. 4 Henry testified that the cashier's checks were a gift from Grace and that Lloyd knew of the gift. Lloyd, however, testified that Grace told him that she gave Henry the money to invest for her. The circuit court held that by executing the check to Grace, Lloyd made a gift of $41,750[] from joint funds of the parties to his wife Grace, and that the check to Grace represented his consent in writing to a gift from Lloyd to Grace. Thus, the court concluded that Grace's gift of those funds to Henry required no further written joinder by Lloyd as the funds were already excluded from Grace's augmented estate. In her will, Grace devised to Henry a parcel of real property, located in the Town of Farmville, that she previously had received as a gift from her mother. That real property was the residence of Lloyd and Grace and was encumbered by a deed of trust, which Grace had executed as the sole owner of the property. The deed of trust secured the payment of a note in the principal amount of $50,000, which both Lloyd and Grace had 4 Although there is a discrepancy in the written statement of facts with regard to the date Grace and Lloyd deposited the proceeds from the sale of their real property into their joint checking account and the date Grace acquired the cashier's checks, it does not affect the Court's analysis of the issues on appeal. 3 executed as co-makers. They used $25,000 of the loan amount to repair the Farmville residence, but Lloyd withdrew the remaining $25,000 and deposited that sum into an account held solely in his name. Lloyd stipulated that, as co-maker of the note, he was liable for one-half of the principal amount, i.e., $25,000, together with interest, and that such sum should be deducted from his elective share of Grace's augmented estate. The circuit court accepted an appraisal of the Farmville residence showing the property to be worth $170,000. The court found that Grace had failed to maintain that real property as separate property to the extent of $120,000 because Grace and Lloyd used part of the loan proceeds to repair and improve the property. Thus, the circuit court included the amount of $120,000 in Grace's augmented estate. Of that amount, Lloyd's elective share, one-third of the augmented estate, was $40,000. The circuit court further concluded that Lloyd and Grace's estate each should repay one-half of the first $25,000 of the loan proceeds because that amount was used to repair the Farmville residence. Because Lloyd withdrew the remaining $25,000 and deposited the funds into an account in his name alone, the court concluded that he must repay the second $25,000 withdrawal. Thus, the circuit court attributed $37,500 of the $50,000 indebtedness to Lloyd and ordered that amount deducted 4 from his $40,000 elective share, leaving Lloyd with the net sum of $2,500. The circuit court incorporated these and other findings regarding Grace's augmented estate in a final order. We awarded Lloyd an appeal on two issues: (1) whether the circuit court erred by holding that the $41,750 check payable to Grace excluded those funds from her augmented estate and that no further written joinder by Lloyd was required when Grace gave the money to Henry; and (2) whether the circuit court erred by requiring Lloyd to repay one-half of the $25,000 loan proceeds used to repair the Farmville residence in addition to the other $25,000 of the indebtedness. We will address the issues in that order.