Private Client Services Update – 2014 Virginia Legislative Update – Trusts & Estates Law Changes
By Sarah E. Messersmith, Estate, Trust & Wealth Transfer
The 2014 Virginia legislative session resulted in several important changes to trusts and estates law. Except as otherwise noted, the new laws became effective July 1, 2014.
Trust Director Defenses (Senate Bill 345)
Virginia Code Section 64.2-770 was amended to confirm that even if a trust provides that the trustee is not liable for breach of fiduciary duty as a result of following instruction from a third party trust director, the trust director has fiduciary liability to the same extent as a trustee. The trust director also is entitled to assert the same defenses as a trustee against a claim of breach of fiduciary duty. However, as with trustees, a trust may not excuse trust directors from liability for breach of trust committed in bad faith, breach of trust committed with reckless indifference to the trust purposes or the beneficiaries’ interests, or breach of trust resulting from an abuse of a fiduciary or confidential relationship with the settlor of the trust. For a more detailed look at trust directors, please see this recent article written by Christopher Johnson.
Requirement of Secured Bond for Decedent’s Estate (House Bill 1196)
Virginia Code Section 64.2-505 was amended to permit the Circuit Court Clerk at his or her discretion to require the personal representative of a decedent’s estate to obtain a surety bond, even though it otherwise would not be required.
Increased Statutory Sums (Senate Bill 346)
The following statutory sums were increased:
- The maximum value of a decedent’s estate for which a personal representative is permitted to qualify without reporting to a Commissioner of Accounts was increased from $15,000 to $25,000 (Virginia Code Section 64.2-1302)
- The maximum amount that can be treated as a small estate and paid to a successor without requirement of an affidavit was increased from $15,000 to $25,000 (Virginia Code Section 64.2-602)
- Exempt property and homestead allowance for the estate of a decedent both were increased from $15,000 to $20,000 (Virginia Code Sections 64.2-310 and 311)
- Family allowance for the estate of a decedent was increased from $18,000 to $24,000 (Virginia Code Section 64.2-309)
- Value of prior gifts to be included in the calculation of a decedent’s augmented estate was increased from $10,000 to the then-current annual federal gift tax exclusion amount by use of a formula (Virginia Code Section 64.2-305)
- The maximum amount that may be transferred to a custodian under the Uniform Transfers to Minors Act without Court approval was increased from $10,000 to $25,000 (Virginia Code Section 64.2-1905)
Real Estate Taxes (House Bills 46 and 1000)
Virginia Code Sections 58.1-3210, 58.1-3211.1, and 58.1-3212 were amended to clarify that the real estate tax exemption for elderly and disabled persons applies whether the property is owned individually, as tenants by the entirety, as joint tenants, as a single or joint life estate, by a revocable trust if the elderly or disabled person has the power to revoke, or by an irrevocable trust if the elderly or disabled person has a life estate. Virginia Code Sections 58.1-3219.9 through 58.1-3219.12 were added to provide that an un-remarried spouse of a member of the U. S. armed forces who is killed in action after January 1, 2015, is exempt from paying real estate taxes on the primary residence. – Sarah Messersmith
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2023.