Opinion ID: 1057830
Heading Depth: 2
Heading Rank: 2

Heading: Augmented Estate

Text: As relevant to this appeal, the term augmented estate means the estate passing by testate or intestate succession, real and personal, after payment of allowances and exemptions . . . to which is added the sum of the following amounts: . . . . 3. The value of property transferred to anyone other than a bona fide purchaser by the decedent at any time during the marriage to the surviving spouse, to or for the benefit of any person other than the surviving spouse, to the extent that the decedent did not receive adequate and full consideration in money or money's worth for the transfer, if the transfer is of any of the following types: . . . . d. Any transfer made to or for the benefit of a donee within the calendar year of the decedent's death or any of the five preceding calendar years to the extent that the aggregate value of the transfers to the donee exceeds $10,000 in that calendar year. Code § 64.1-16.1(A)(3)(d). To prevent one spouse from disinheriting the other by transferring property before the transferor dies, this statutory provision imputes to the decedent's augmented estate the value of property transferred by the decedent during the marriage. Chappell v. Perkins, 266 Va. 413, 421, 587 S.E.2d 584, 588 (2003). If, however, property was transferred by the decedent 6 during marriage with the written consent or joinder of the surviving spouse, the value of the transferred property is not included in the transferring spouse's augmented estate. Code § 64.1-16.1(B)(i). The exclusion in subsection (B)(i) is at issue in the case now before us. The party seeking such an exclusion of property from a decedent's augmented estate carries the burden of establishing it. Chappell, 266 Va. at 418, 587 S.E.2d at 587. We addressed this particular exclusion in Chappell. There, the real property at issue, known as the Elliotts Creek property, was purchased by a husband and wife as tenants by the entirety. Id. at 417, 587 S.E.2d at 586. Subsequently, they executed a deed of gift conveying the property to the wife in fee simple, and the wife then transferred the Elliotts Creek property to her revocable living trust. Id. The wife died and the husband filed a claim for his elective share of the decedent's augmented estate. Id. at 416, 587 S.E.2d at 585. The decedent's estate asserted that the transfer of the property by [the wife] and [the husband] to [the wife] was a transfer of property by [the wife] made with the written consent or joinder of [the husband] and therefore, that the value of the property should be excluded from [the decedent's] augmented estate under Code § 64.1-16.1(B)(i). Id. at 421, 587 S.E.2d at 588. 7 We concluded that the circuit court did not err by including the Elliotts Creek property in the decedent's augmented estate. Id. at 422, 587 S.E.2d at 589. Holding 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 concluded that the transfer of the Elliotts Creek property to [the wife] in fee simple did not remove the property from, or decrease the value of, [the decedent's] estate. Id. We explained that [i]f a transfer does not remove the property from the transferring spouse's estate, the consent of the nontransferring spouse, while a consent to the transfer, is not a consent to any diminution in the estate by virtue of that transfer. Id. Thus, the Elliotts Creek property did not come within the exclusion in Code § 64.1-16.1(B)(i) because the husband's consent to the transfer of the property to the wife was not a consent to a decrease in the value of the decedent's estate. Id. Relying on Chappell, Lloyd argues that his consent to the transfer of joint funds to Grace alone was not a written consent to or joinder in her subsequent gift to Henry. Lloyd further contends the circuit court erred by concluding that he did not need to consent to or join in Grace's gift to Henry because the funds were already excluded from Grace's augmented estate. 8 Henry, however, contends that Lloyd's act of preparing, signing and giving the $41,750 check to Grace with the knowledge that she intended to give the proceeds to Henry constituted his written consent, or at least his joinder, in Grace's subsequent gift to Henry. Contrary to Henry's assertions, the check from Lloyd to Grace merely transferred $41,750 of jointly owned funds to Grace. At that juncture, the funds gifted to Grace became her sole property. Lloyd's execution and gift of the check to Grace did not remove those funds from, or decrease the value of, Grace's estate. In other words, the check represented Lloyd's consent to the transfer of joint property to Grace alone but it did not signify his consent to remove the property from or diminish the value of Grace's estate. And, contrary to the circuit court's holding, Lloyd's gift to Grace did not exclude those funds from her augmented estate. Consequently, Lloyd's written consent to or joinder in Grace's subsequent gift to Henry was still required. Thus, the circuit court erred by excluding the sum of $41,750 from Grace's augmented estate.