What Happens After You Die in Virginia?
At some point or another, we’ve all asked ourselves or others this question. In fact, since the dawn of man we’ve wondered what happens after death. Well we have answers!
Regardless of whether you die with a will, a trust or neither – your state has rules for how to dispose of your earthly assets. However, not all estates need go through the full formal “probate” process. Depending on the certain aspects of the property and their legal status, probate may be necessary. In other instances, the personal representative of the estate may have a choice whether to initial formal probate or not.
What is Probate?
Probate is the court-monitored statutory process of (1) qualifying a personal representative, (2) identifying the decedent’s probate assets, (3) ensuring that all debts are paid and (4) distributing the remaining assets according to the wishes of the decedent or according to state law.
Are There Different Types of Probate in Virginia and DC?
Yes! Most jurisdictions have different options for probate depending on the size of the estate. For instance, in Virginia there are three ways to dispose of property depending on the size of the estate:
- Full Probate – If the probate estate is larger than $50,000, then full formal probate must be initiated (more on this process below);
- Small Estate Probate – If the probate estate is less than $50,000 and more than 60 days have passed since the death of the decedent, then the will must be admitted to probate BUT the personal representative does not have to be qualified and the person claiming to distribute the assets must file an affidavit meeting the requirements of Va. Code §64.2-601 which include the names and addresses of all beneficiaries (if there is a will) or heirs at law (if there is not a will) who are expected to inherit assets. This is commonly referred to as “recording the will” rather than administering formal probate.
- Small(er) Estate – If the probate estate is less than $25,000, then the holder of those assets may distribute them to beneficiaries/heirs at law without filing an affidavit under Va. Code §64.2-601. However, many attorneys will advise clients seeking to administer this type of estate to record the will and qualify as an executor in order to obtain letters of qualification from the court in order to access the assets. Although this also means payment of court costs and the probate tax (which would minimal for such a small estate), it still avoids the other requirements of formal probate.
In Washington, D.C., the law also provides for an abbreviated probate process for smaller estates. D.C. Code §§20-351, et seq. If the estate is less than $40,000, D.C. law allows for a Petition for Administration of Small Estate. The court qualifies a personal representative to distribute assets and generally finalizes the entire process within 120 days. Similar to Virginia, the small estate petition in Washington, D.C. must include a list of all beneficiaries and/or heirs at law.
Probate Assets v. Non-Probate Assets
Non-probate assets are things that are co-owned jointly or assets that pass automatically by law to another person upon death.
Co-owned Assets
Co-owned assets might include joint bank accounts, vehicles titled to two or more people or personal tangible property which is co-owned with another person. For instance, many married couples own the bulk of their assets jointly. Those items become automatically the property of the co-owner upon the death of one of the owners and are not considered part of the “probate estate.”
Transfer on Death Assets
Assets that pass by law to another person include things like payable on death or transfer on death accounts. For instance, retirement accounts and certain investment portfolios may have designated beneficiaries. These accounts will pass automatically those designated beneficiaries by law upon the death of the owner and are not considered part of the “probate estate.”
Rights of Survivorship
Likewise, if real estate is owned jointly by two or more persons with “rights of survivorship,” then the death of own owner means the remaining owner(s) assumes that person’s share of the real estate ownership automatically. This is most common with married couples. Real estate owned jointly with the right of survivorship is not part of the “probate estate” so long as the other owner is still alive when the decedent passes away.
Probate Estate
Probate assets are everything leftover that was owned solely by the decedent at the time of death. Depending on their circumstances and if they were survived by a spouse, the probate estate could be very small or non-existent or could consist of most, if not all, of their assets. Usually, a decedent who pre-deceases a spouse will have a smaller probate estate whereas a decedent who survived their spouse may have a much larger probate estate (having inherited their deceased spouse’s assets previously).
To Probate or Not to Probate?
As mentioned above, in certain circumstances (estates over $40,000 in Washington, D.C. and over $50,000 in Virginia) the estate must be legally be admitted to probate in order to distribute/claim estate assets. However, in other circumstances (involving small estates), the personal representative may wish to avoid probate altogether. One of the first things to determine is what estate assets are “probate assets” and which are “non-probate assets.”
Small Assets in Probate
If the probate assets are small, a person might consider opening a small estate or, in Virginia, simply recording the will and distributing the assets if the estate is smaller than $25,000.
Do You Qualify as an Executor?
Another question is whether to qualify as an executor because the executor has certain duties and responsibilities, one of which is to ensure that all debts of the decedent are paid. If the estate is quite small and there are likely more debts than assets, the potential executor may elect not to be qualified and thereby avoid the duty to pay off debts with likely no compensation.
There are many other factors and circumstances to consider when determining whether to proceed with probate and/or to qualify as an executor. A qualified and experienced attorney can help guide this process.
What Does Probate Involve?
The probate process can be complex, nuanced and somewhat daunting. With experience, however, it can proceed smoothly and quickly. The majority of executors qualified to represent an estate are family members who have never been through the process before and likely will never go through it again. Many consult with counsel to guide the process while others often waive their nomination as executor and hire an attorney to actually serve as the executor.
Probate varies significantly from state to state and even from county to county (or city to county, etc.). However, it can generally be summarized as follows:
Admission of Will to Probate and Qualification of Personal Representative
If the decedent died with a will, the original will must be brought to the court along with a certificate of death and other paperwork relating to the estate and the personal representative to be qualified (“executor” if a will exists; “administrator” if no will).
If the decedent died without a will, everything listed above must be presented to the court except for a will. The person seeking to be qualified as personal representative will be qualified as the “administrator” of the estate rather than as the “executor,” although they have all the same powers, duties and responsibilities.
If everything is done properly, the court will issue letters of qualification to the executor/administrator. These letters are “the keys to the kingdom” and will be honored by most financial and other institutions granted access to the decedent’s records and assets.
Notice to beneficiaries/heirs at law
Once qualified as the executor or administrator, that person generally must send out notices to any and all named beneficiaries AND heirs at law (even if not named in a will) that includes specific statutory language. This notice is intended to let the beneficiary/heir at law know that probate has been commenced for the decedent’s estate, where and by whom, and that they have been identified as either a beneficiary or an heir at law (though they may not necessarily be entitled to any distributions). This way any such person can request filings and potentially dispute the proceedings.
Initial inventory
Within a certain timeframe depending on state law, the executor/administrator will need to file an inventory of probate assets the decedent possessed at the time of death. This requires some looking back as the inventory will likely be filed many months after the decedent died. The purpose of the inventory is to give the court an idea of what assets existed at the time of death so that the court can track those assets and ensure that they are eventually distributed as directed by the will or state law.
Statement of Accounting
Depending on state law, around one year after the qualification of executor/administrator, a statement of accounting must be filed with the court documenting all payments and distributions from the estate with specificity. This will also include payments to the executor/administrator to reimburse for expenses incurred by them on behalf of the estate. Receipts or other documentation is usually required. If all known creditors have been paid and all distributions have been made by this point, then this statement will serve as both the initial and final statement of accounting.
If the estate still has assets by this time, then the executor/administrator will have to continue filing statements of accounting with the court periodically depending on state law.
Estate Planning to Avoid/Minimize Probate
There are multiple ways to attempt to avoid or minimize the necessity of probate during your own lifetime. The primary method of doing so is by reducing the size of your anticipated probate estate itself. Through savvy estate planning during your lifetime, you can use trusts and payable-on-death or transfer-on-death accounts to convert assets that would have been subject to probate to non-probate assets.
When to Hire an Estate Administration Lawyer in Alexandria, Northern Virginia
While there are many reasons to create a trust including avoiding the probate process, every person’s circumstances and wishes are different. Consultation with an experienced estate planning and estate administration attorney is highly recommended.