January 1, 2017, Virginia Code § 64.2-308.1, et seq. changed. This law concerns the surviving spouse’s elective share of his or her deceased spouse’s estate.
Under the prior law, a spouse who died either intestate or who didn’t leave his or her spouse property (disinheritance), had a right to claim an elective share of the deceased spouse’s property. If a spouse had children from another relationship this often caused a great deal of anguish because the surviving spouse was entitled to only 1/3 of his or her spouse’s estate while the children (including adult children) received the remainder.
Under the new law however, a surviving spouse has a right to claim a percentage of 1/2 of the value of the marital property included in the augmented estate. This includes: 1. The decedent’s net probate estate, 2. The decedent’s non-probate transfers to others, 3. The decedent’s non-probate transfers to the surviving spouse, and 4. The surviving spouse’s property and non-probate transfers to others. This means that even the surviving spouse’s property is included in the calculation of the augmented estate. So the law essentially now includes ALL the property of the marriage, not just that property in the probate estate. This now includes property from revocable trusts and property by transfer on death and beneficiary-driven assets.
The statute also provides that while the surviving spouse can claim up to 50% of the augmented estate, it is now dependent upon how long the couple were married. No longer can a spouse of 3 months claim 1/3 of the deceased spouse’s estate. According to the statute, the value of the augmented estate is determined by a multiplier based upon how long the couple was married. For example, if the couple was married for less than 1 year, the multiplier is 3%. If they were married 9 years but less than 10 years, the multiplier is 54%. If the couple was married for more than 15 years, the multiplier is 100%. Then the surviving spouse is entitled to 50% of that figure.
Additionally, even if the principal family residence is involved in the augmented estate, the surviving spouse cannot be kicked out by the deceased spouse’s children while any action is being taken to determine what the elective share is and how to pay it. The surviving spouse may occupy and enjoy the residence without charge for rent, repairs, taxes or insurance. If the surviving spouse is deprived of possession, he or she may file a complaint with the court for unlawful entry or detainer and is entitled to recover possession and damages for the period of time he or she was deprived.
So what does this mean? It means that it is more important than ever to make sure you have your estate plan in order. Don’t assume that you are taken care of and that your spouse is taken care of. Planning is beyond important in this day and age of second and third marriages with children from prior marriages. I have personally seen how this negatively impacted long-term spouses. I have also seen how short-term marriages negatively impacted inheritance by children. It leads to hurt feelings and lawsuits. A little planning can go a long way in curbing a negative outcome.