Virginia Probate: Who is involved in the process?
Find out more about the various officials that are involved in the probate process and what their roles are.
Virginia probate is a complicated, lengthy process depending on the type of estate that you are dealing with. However, there are several people who will likely be involved throughout the probate process. If you have been appointed as administrator or executor, you need to be familiar with these people and their role.
So who are these people, and what do they do?
Commissioner of Accounts
The Commissioner of Accounts (“COA”) is an individual that is appointed to an estate to make sure that all the financial aspects of the estate are treated properly. The COA is typically an attorney, and the COA has significant power in probate proceedings. For example, the COA can demand inventories and accountings of an estate. The COA also has the ability to prolong proceedings and bring independent actions against an administrator or an executor if they have failed to properly perform their duties.
Therefore, It is important to listen to the COA when you are probating an estate. They can be an invaluable asset in getting the estate resolved. However, they can also be a powerful enemy if you have failed to properly perform your duties.
Probate Clerk
Each court in Virginia has a number of clerks. These clerks are there to make sure that the appropriate documentation is filed with the court in order for the case to start. There are several different types of clerks including land records clerks and probate clerks. A probate clerk’s job is to sit down with the person who intends to administer the estate and to explain what documents are necessary in order to begin.
It is important to work with the probate clerk in your local area to determine what local rules there may be. Failure to adhere to these rules may prolong the administration of the estate.
Creditors
An estate may also have several people that money is owed to. These are creditors. A creditor representative can file claims against an estate. It is important to work with the creditor representative to determine how much is owed on the debt and how that debt will be treated during probate.
Bonding Company
Sometimes, you may be required to post a bond if the will wasn’t properly drafted. A bond company may be involved in helping you post a bond with the court to cover the liability of probating the estate. It is important to work with your bond company representative to determine how much of a bond is required, and how that bond is treated.
Why you need a probate lawyer.
With all these moving parts, it is easy to get lost in probate proceedings. A lawyer can help you navigate interacting with these various representatives and to make sure you do your job properly. Failure to properly administer an estate could subject you to personal liability. If you are considering qualifying to probate an estate, seek legal help.
Virginia Estate Planning: Types of Trusts
Find out more about the various types of trusts in the Commonwealth of Virginia, and learn a little about which types of trusts may be best for you.
If you have significant assets such as real estate or liquid capital, you may want to consider the estate planning tool know as a trust. A trust is an arrangement which you can create which allows you to transfer title of your assets and to plan for certain tax consequences of allowing those assets to go through probate. A trust is also an excellent way of avoiding conflict between your heirs over the meaning of a will, or how an estate will be settled by your executor.
However, there are many different types of trusts in Virginia, and it is important that you have a basic familiarity of these trust types to help you understand your lawyer’s advice.
Revocable v. Irrevocable Trust
A living trust is a type of trust that you create during your lifetime. There are two major types of living trusts; revocable and irrevocable trusts. With either type of trust, your assets are transferred into the ownership of the trust. Technically, you no longer own the property that is put in the trust.
The difference between the two trust types boils down to how much control you maintain over the trust after it is created. A revocable trust allows you to make changes to the trust during your lifetime. For example, if you decide you want to dismantle the trust.
In contrast, an irrevocable trust cannot be dismantled, and the property remains in the trust during your lifetime. There are several benefits to an irrevocable trust depending on the value of your estate and the likelihood that your heirs will contest how your estate is handled.
Subtypes of Trusts
These two major categories of trusts can be further split into various categories depending on why you create the trust, the type of property you put into the trust, and how much power you want to give to your heirs in the trust. Common examples of subtypes of trusts include;
Generation skipping trusts, which allow you to pass property from yourself to your grandchildren.
Land trusts, which allow land to be managed by your family.
Medicaid planning trusts, which allow you to put your property into a trust to allow you to qualify for medicaid if you have too many assets.
Special needs trusts, if you have a family member with mental health needs or other disabilities.
Spendthrift trusts, which allow you to limit the amount of money your heirs receive over a period of time if you are afraid they will spend all the money too quickly.
Charitable trusts, which allow you to leave money to a charitable organization of your choice.
QTIP, which is a type of trust that allows you to leave tax-incentivized assets to your spouse.
Why you need an estate planning lawyer.
As you can see, trusts are a very complicated area of law which require a significant amount of thought. There are many different types of trusts in Virginia, and the one that is right for you depends largely on why you want to create the trust and what the trust is to be used for. A lawyer can help you navigate these various types of trusts to determine which is best for you.
Virginia Probate: How Lawyers Avoid Probate
Find out more about how to avoid the costly probate process, and how a lawyer can help you plan for your family's future.
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.
Life Insurance
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.
Virginia Probate: Size of Estates
Estates come in all shapes and sizes. What types of estates do you need to be familiar with if you have been appointed to probate an estate?
Virginia probate law comes in many different shapes and sizes. An executor's obligations largely depend on the amount of assets the estate has and the amount of liabilities the estate has. An estate can be split into three categories; insolvent estate, small estate, and large estate based on these characteristics. Each type of estate has their own tax liabilities and creditor issues that you need to be aware of.
Insolvent Estates
If your relative owes more debt than the value of the estate, you have an insolvent estate. This can impact the probate of a will if there is valuable property that needs to be sold to satisfy the creditors. For example, if your relative has a significant amount of medical debt and also has a ferrari, then the ferrari may need to be sold to pay for the medical debt. This occurs even if the will says that the ferrari is to be given to a specific beneficiary.
There can be some limitations on the ability of an executor to handle the sale of the estate’s property. For example, if there is no will that grants the executor a power to sell real estate, the executor may need to petition the court for approval to sell any real estate to satisfy creditors.
Finally, various types of creditors are treated differently depending on the nature of the debt. This is called priority. Some creditors are supposed to be paid before others.
Small Estates
Virginia law makes it easier to probate estates that are valued below a certain threshold. If the value of the estate is below Fifty Thousand, which excludes some specific assets, then the estate may qualify for small estate administration. Virginia law requires you to file specific forms and follow specific procedures in order to allow for a small estate administration. When considering whether a small estate administration is appropriate, it is important to consult with a lawyer to determine which assets are counted towards the threshold value. The benefit of small estate administration is that it does not have as many administrative requirements and the timeline is much shorter.
Large Estates
In contrast with small estates, large estates can take a significant amount of time to probate. These are estates that are valued at more than Fifty Thousand. A typical estate may take as long as two years to fully probate depending on the complexity of the estate and the types of debts that need to be paid. Generally speaking, a commissioner of accounts, a public official, helps manage the probate of the estate. The commissioner is important to work with, as they have significant powers over the administration of the estate.
The commissioner is likely to require several accountings and inventories which outline the assets and liabilities of the estate. These documents must be filed timely, or the executor may be subject to certain penalties depending on the nature of the violation.
Why you need a probate lawyer.
No matter what type of estate you have, you need a probate lawyer. Failure to properly administer an estate may result in personal liability. For example, if you fail to pay a creditor or timely file an accounting or inventory, you may be on the hook for a significant amount of money. Consult with a lawyer if you have been appointed pursuant to a will to manage probate, or if you have elected to do so on behalf of a relative that died intestate. Finally, an executor is entitled to certain compensation.
Virginia Probate: Intestate v. Testate
What is the difference between intestate and testate estates?
If a family member of yours has recently passed away or if you are planning for your future, there are a lot of different options available for passing property on to heirs. At a bare minimum, you need to be aware of the types of planning options that are available to you. The first distinction you need to be familiar with is what an estate is, and what the different types of estates are.
Many jurisdictions, including Virginia, distinguish between several different types of estates. For the purposes of this article, we will be looking at the distinction between “testate”’ and “intestate.”
What does "intestate" mean?
An estate is considered to be intestate when you have failed to create some kind of document which tells your state how you wish for your assets to be distributed. Common examples include wills and trusts. If you do not have a will or a trust, the law of the state where you last resided generally takes control.
In Virginia, these “intestacy rules” determine which of your heirs get which property. Virginia law states that, if you do not have a will and you do not have children from a different marriage, your spouse will take all of the property. However, if you have children from another marriage, those children are entitled to two-thirds (⅔) of your property, and your spouse is entitled to one-third (⅓) of your property.
In the event that your spouse has predeceased you, and all of your children are from that marriage, then your property will be split up into as many equal shares as there are children. For example, if you have three children, each child will get one-third (⅓) of your property. If one of your children predeceases you, that child’s share will then be split up into equal shares based upon the number of children that child had.
There are more rules than this, and this is just a simple example of how Virginia treats property if you do not have a will. If there is specific property that you wish to give to specific people, you must have a will or some other estate planning document.
What does "testate" mean?
Testate means you have at least some form of estate planning document, primarily a will. The purpose of the will is to direct your state on how you wish your property to be treated. There are many different types of wills. I will discussed the various types of wills in a later post.
Why you need a lawyer.
A lawyer is important for several reasons if you have a loved one who is recently deceased or if you are planning for your own future. A lawyer can help you navigate the complex probate process and determine what steps are best taken in order to distribute the property and minimize tax liability. Furthermore, a lawyer can help you prepare for the future and determine which type of estate planning document is best for you.