CHAPTER 679
An Act to amend and reenact § 64.1-62.4 of the Code of
Virginia, relating to wills and trusts; formula clauses referring to federal
estate tax and generation-skipping transfer tax laws; application.
[S 1423]
Approved March 26, 2011
Be it enacted by the General Assembly of Virginia:
1. That § 64.1-62.4 of the Code of Virginia is amended and
reenacted as follows:
§ 64.1-62.4. Certain formula clauses to be construed to refer
to federal estate and generation-skipping transfer tax laws applicable to
estates of decedents dying in 2010.
A. A will or, trust, or other instrument
of a decedent who dies after December 31, 2009, and before January 1, 2011,
that contains a formula referring to the "unified credit,"
"estate tax exemption," "applicable exemption amount,"
"applicable credit amount," "applicable exclusion amount,"
"generation-skipping transfer tax exemption," "GST
exemption," "marital deduction," "maximum marital deduction,"
"unlimited marital deduction," "inclusion ratio," "applicable
fraction," or any section of the Internal Revenue Code relating to the
federal estate tax or generation-skipping transfer tax, or that measures a
share of an estate or trust based on the amount that can pass free of federal
estate taxes or the amount that can pass free of federal generation-skipping
transfer taxes, or that is otherwise based on a similar provision of federal
estate tax or generation-skipping transfer tax law, shall be deemed to refer to
the federal estate tax and generation-skipping transfer tax laws as they
applied apply with respect to estates of decedents dying on
December 31, 2009 in 2010 regardless of whether the decedent's personal
representative or other fiduciary elects not to have the estate tax apply with
respect to the estate. This provision shall not apply with respect to a
will or, trust, or other instrument that is executed or
amended after December 31, 2009, or that manifests an intent that a
contrary rule shall apply if the decedent dies on a date on which there is
no then-applicable federal estate or generation-skipping transfer tax. If the
federal estate or generation-skipping transfer tax becomes effective before
that date, the reference to January 1, 2011, in this subsection shall refer
instead to the first date on which such tax becomes legally effective.
B. The personal representative, trustee, other fiduciary,
or any affected beneficiary under the will, trust, or other instrument
may bring a proceeding to determine whether the decedent intended that the
formulae under subsection A will, trust, or other instrument be
construed with respect to the law as it existed after December 31, 2009.
Such a in a manner other than as provided in subsection A. A
proceeding under this section shall be commenced within 12 months following
the death of the testator or grantor prior to January 1, 2012. In
such a proceeding, the court may consider extrinsic evidence that contradicts
the plain meaning of the will, trust, or other instrument. The court shall have
the power to modify a provision of a will, trust, or other instrument that
refers to the federal estate tax or generation-skipping transfer tax laws as
described in subsection A to (i) conform the terms to the decedent's intention
or (ii) achieve the decedent's tax objectives in a manner that is not contrary
to the decedent's probable intention. The court may provide that its decision,
including any decision to modify a provision of a will, trust, or other
instrument shall be effective as of the date of the decedent's death. A person
who commences a proceeding under this section has the burdens of proof, by
clear and convincing evidence, and persuasion in establishing the decedent's
intention that the will, trust, or other instrument be construed in a manner
other than as provided in subsection A.
C. For purposes of this section, interested persons may
enter into a binding agreement to determine whether the decedent intended that
the will, trust, or other instrument shall be construed in a manner other than
as provided in subsection A, and to conform the terms of the will, trust, or
other instrument to the decedent's intention without court approval as provided
in subsection B. Any interested person may petition the court to approve the
agreement or to determine whether all interested persons are parties to the
agreement, either in person or by adequate representation where permitted by
law, and whether the agreement contains terms the court could have properly
approved. In the case of a trust, the agreement may be by nonjudicial settlement
agreement pursuant to § 55-541.11. "Interested person" means any
person whose consent is required in order to achieve a binding settlement were
the settlement to be approved by the court.
2. That an emergency exists and this act is in force from its
passage.
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