Gifts Made Just Prior to Death

The Hotchpot Probate Rule

Although the administration of the estate is similar to an estate with a Will, there is one important exception set under § 64.1-17 of the Code of Virginia. A gift made to a descendant by the decedent prior to his death is considered an advancement. This gift shall be brought into hotchpot with the whole estate. Therefore the share of the gifted beneficiary will include the gift made to such beneficiary.

The hotchpot rule applies to intestacy or partial intestacy and only among children. The advancements to children are not brought into hotchpot for the benefit of the surviving spouse who is only entitled to share in the estate of the intestate of which the decedent died possessed a gift has been made during the life of the decedent to a child, the presumption is that the gift was made in advancement of the share that the child will receive 

upon death. The court will  look at the circumstance around the gift and any statement made by the decedent at the time of  the gift or during his/her life. This presumption is rebuttable. A substantial gift is by itself  evidence that the gift was intended as an advancement.

Gifts Made By or on Behalf of Someone Who s Shortly Thereafter Dies Certain gifts made within less than three years of the death of the donor, are included in 
the decedent’s gross estate for federal estate tax purposes. The gifts fallen under this rule are: (1)  transfer of life insurance policies on the life of the decedent, (2) transfers11 of retained interests or powers that would have been included in the gross estate held the decedent continued to hold  the interests or powers until death, (3) gifts where taxes were paid. There are no consequences at the state level for the Commonwealth of Virginia. It maybe different in other state. The executor should consult with local counsel on this issue.