Many people believe that having a Will avoids the probate process entirely. Unfortunately, those individuals are mistaken. Every person should have a Will in their estate plan in order to name a person to handle your estate when you pass away (Executor); state how you want your assets to be distributed; and to name guardians for any minor children you may have. However, if a Will is your only estate planning tool, then the person you have named as Executor may have a lot of work on their hands during the probate process.
The Probate Process
- Once you pass away, your Executor will need to call the probate office in the Virginia county that you passed away in to schedule an appointment. Recently, these appointments in Northern Virginia are four to eight weeks away. This means that during this waiting period, your assets cannot be touched. Your Executor will need to bring to the appointment with the probate office your death certificate, the original of your Will, names, addresses, phone numbers, and ages of your heirs at law and any beneficiaries named in your Will, and an estimate of the value of your total probate estate.
- After your Executor has been officially qualified by the Court at the probate appointment, his job officially begins. Your Executor will need to contact IRS to obtain an EIN number for the estate. Your Executor will need to open an estate account at a bank. He or she will then begin the process of gathering all of your assets together and determining the values of all of your assets on the date you passed away.
- Your Executor has to send an official Notice to all of your heirs at law and your beneficiaries within 30 days of being officially appointed as your Executor by the Court at the probate appointment. He or she will then have to file an Affidavit of Notice with the Court.
- Within four months after being officially appointed by the Court as your Executor, he or she will have to file the Inventory. The Inventory lists all of your assets that are being probated, along with any other joint assets you held. Your Executor has to also put the value of each of these assets on your date of death. This can become a difficult task for your Executor because he or she will need to contact each account that you hold and obtain documentation that shows what the value of that account was on your exact date of death.
- Your Executor will also have to file an annual Accounting with the Commissioner of Accounts for each year he or she is handling your estate. The Accounting will show any increases or decreases in your assets’ values since your date of death. The Accounting will also show the disbursements that the Executor has made to the beneficiaries. Once the Executor has made final disbursements, a Final Accounting will be made to the Commissioner of Accounts.
- If there are any debts of your estate, your Executor will also need to pay these debts prior to making disbursements to your beneficiaries. If your debts are larger than the amount of assets you had, then your Executor will need to file to have a debts and demands hearing before the Commissioner of Accounts in order to determine the order of debts to be paid from your estate.
- There are fees that are paid to the Court and to the Commissioner of Accounts at each step and with each filing that your Executor makes during the entire probate process which can take a number of years depending on the assets that are in your estate.
How Can You Avoid Probate:
- Create a Revocable Living Trust. A Revocable Living Trust is created during your lifetime. You may name yourself as Trustee of your own Trust. By re-titling your assets into your Trust or by naming the Trust as beneficiary, you are able to avoid probate. For more information on the benefits of Revocable Living Trusts check out this earlier blog posting – http://www.deblaw.com/wordP/?p=22
- Joint Ownership – If you own property or an account jointly with someone else, and this ownership is with rights of survivorship, then the surviving owner will automatically own the property or the account upon your death and no probate would be necessary for that asset. However, do not attempt to add another individual to any of your accounts or property without first consulting with an attorney to make sure there are no other tax consequences or liability consequences to such a decision.
- Payable on death designations and Beneficiary Designations – Any asset that you have a payable on death designation or beneficiary designation on will not be probated. This means if you have named your child as the beneficiary on your life insurance then the life insurance will not have to go through probate. Your child will be able to receive the life insurance by providing a copy of your death certificate to the life insurance company. You can do the same types of beneficiary designations on your bank accounts through payable on death forms.
- Transfer on death deeds for real estate – Virginia recently enacted legislation that allows you to sign a Transfer on Death Deed for your real estate and record this deed with land records. This Deed names who will receive your real estate upon your death and thus keeps the real estate out of probate.
- Simplified Probate Procedures – Virginia does have a few simplified probate procedures for smaller estates; for estates that are only made up of real estate; and for estates where the Executor and sole beneficiary is the same person.
Overall, probate can be a difficult procedure and hassle to give to someone to handle, and it is important that you understand the process so that you can make an informed decision on how to handle your estate. Sitting down with an attorney is the first step to do this. Contact the Law Office of Deborah N Arthur to arrange a free consultation to discuss your estate plan. Call us at 703-658-6050 or email Rebecca Evans at [email protected] This blog is only for informational purposes. Please remember this is not intended as legal advice and does not create an attorney-client relationship. Every case is special and more information would be needed to provide you the best legal advice possible.