Probate is generally the process by which a deceased individual’s assets are transferred to their heirs. The vast majority of property that an individual owns will pass through probate unless it is a small estate. Property that passes through probate may be sold to satisfy creditors or to pay for administrative fees. This means that some of an individual’s property, even if it is intended for a specific heir, may not make it to that heir depending on how much debt that person has.
However, Virginia law allows you to avoid probate for certain types of property. How is this done, and how can a lawyer help you avoid the costs of probate?
Payable On Death Accounts
One common example of an estate planning method used by lawyers is known as a payable on death account. These types of accounts typically hold a specific amount of assets which are held for a specific beneficiary. These assets are immediately transferred upon death to that beneficiary. This means that the beneficiary will be considered to own that property without having to go through probate.
Some common examples of payable on death accounts include a bank account with cash, a safe deposit box, or event real estate.
Another common method of estate planning available to lawyers is to set up life insurance accounts with specific beneficiaries. This allows an individual to invest their savings into a life insurance plan that will transfer money immediately upon their death to a designated beneficiary. There are several restrictions on how much can be placed in such accounts and what financial institutions qualify to offer these services.
Sharing Real Estate
Finally, another option used by lawyers is to have individuals hold property in a “joint tenancy” arrangement. A common example of this method is to transfer a portion of ownership in a house to a beneficiary with a “right of survivorship,” which means that upon death that beneficiary will own the entire house without having to go through the process of probate.
Why You Need a Probate Lawyer
Each of these options carry with them unique tax and medical planning issues that need to thoroughly be addressed. Every person’s case is unique, and a combination of these plans may be needed to minimize the amount of taxes that are paid and to preserve the property. It is also important to hire a lawyer to understand when not to use these estate planning tools, as creditors may attack your transfers as an attempt to avoid their claims. Hire a lawyer to help you prepare your estate and to protect your heirs.