Opinion ID: 1059179
Heading Depth: 2
Heading Rank: 1

Heading: The Elliotts Creek Property

Text: Finally, the Estate asserts that the circuit court erred in concluding that the value of the Elliotts Creek property was part of Carole's augmented estate because Carole had not transferred the property pursuant to Virginia Code § 64.1-16.1(B)(i) prior to her death. The Estate argues that the transfer of the property by Carole and Walter to Carole in 1991 was a transfer of property by Carole made with the written consent or joinder of Walter and therefore, that the value of the property should be excluded from Carole's augmented estate under Code § 64.1-16.1(B)(i). The Estate's position is based on the literal application of subparagraph (B)(i) and the provisions of Code § 55-41. We reject the Estate's arguments. The provision at issue provides: B. Nothing herein shall cause to be included in the augmented estate (i) the value of the property transferred by the decedent during marriage with the written consent or joinder of the surviving spouse. The Estate argues that a plain reading of this subparagraph is that, once consent to the transfer of the property is made, the value of that property can never be included in the transferring spouse's estate. Such an application of the statutory provision leads to absurd results. For example, if the transferring spouse subsequently repurchases the transferred property, under the Estate's construction of Subsection (B)(i), that property could never be part of the transferring spouse's augmented estate, even though the property was part of the transferring spouse's probate estate because of the subsequent reacquisition. Accordingly, the provision eliminates value attached to a specific conveyance of property, not to specific property. The Estate's construction is also inconsistent with the purpose of the augmented estate legislation, which is to prevent one spouse from disinheriting the other by transferring property prior to the transferor's death and thereby diminishing the transferor's estate. To achieve this purpose, the value of certain property transferred by the decedent during marriage is imputed to the decedent's augmented estate. Code § 64.1-16.1(A)(3). If, however, a spouse had agreed to the transfer, the value of the transferred property is not included in the transferring spouse's augmented estate. Code § 64.1-16.1(B)(i). This exception is based on principles of fairness. When a spouse agrees to a transfer of property that diminishes the transferor's estate, that spouse should not be allowed to reclaim the value of the transferred property in the transferring spouse's augmented estate. See J. William Gray, Jr., Virginia's Augmented Estate System: An Overview, 24 U. Rich. L.Rev. 513, 523 (1990). If a transfer does not remove the property from the transferring spouse's estate, the consent of the non-transferring spouse, while a consent to the transfer, is not a consent to any diminution in the estate by virtue of that transfer. Accordingly, we conclude that that subparagraph (B)(i) of Code § 64.1-16.1 applies when a spouse consents to a specific conveyance that removes the property from, or decreases the value of, the transferring spouse's estate. We also reject the Estate's contention that Code § 55-41 specifically provides that when a husband and wife join in a deed of conveyance, the provisions of Code § 64.1-16.1(B)(i) are satisfied. The Estate reads Code § 55-41 too broadly. Code § 55-41 states in pertinent part: When a husband and his wife have signed and delivered a writing purporting to convey any estate, real or personal, such writing... shall ... operate to manifest the spouse's written consent or joinder, as contemplated in Code § 64.1-16.1 to the transfer embraced therein.... [and] the writing passes from such spouse ... all right, title and interest of every nature[.] This provision declares only that a signed and delivered writing in which both spouses convey property meets the requirement of a spouse's written consent or joinder in Code § 64.1-16.1(B)(i). That statute does not address whether a specific conveyance is the type of transfer that requires exclusion of the property's value from the augmented estate of the transferring spouse under Subsection (B)(i). In this case, the transfer of the Elliotts Creek property to Carole in fee simple did not remove the property from, or decrease the value of, Carole's estate. Although consenting to that transfer, Walter did not consent to a decrease in the value of Carole's estate. Accordingly, the conveyance was not subject to Code § 64.1-16.1(B)(i) because it did not result in the diminution of Carole's estate and, therefore, the circuit court did not err in including the Elliotts Creek property in Carole's augmented estate. For these reasons we affirm the judgment of the trial court. Affirmed.