CODE OF VIRGINIA

CERTAIN FORMULA CLAUSES TO BE CONSTRUED TO REFER TO FEDERAL ESTATE AND
GENERATION-SKIPPING TRANSFER TAX LAWS APPLICABLE TO ESTATES OF DECEDENTS DYING
AFTER DECEMBER 31, 2009, AND BEFORE JANUARY 1, 2011 (§ 64.2-432)

A. A will, 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 apply with respect to estates of decedents dying 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, trust, or other
instrument that manifests an intent that a contrary rule shall apply.

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 will, trust, or other
instrument be construed in a manner other than as provided in subsection A. A
proceeding under this section shall be commenced 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 § 64.2-709. “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.

HISTORY: 2010, c. 238, § 64.1-62.4; 2011, c. 679; 2012, c. 614; 2013, c. 784.