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Virginia Probate – Initial Steps to Determine the Proper Probate Strategy

Virginia Probate — Initial Steps to Determine the Proper Probate Strategy

By Attorney Jennifer Kahl on Monday, January 21, 2019 (updated July 14, 2021)

 

Your loved one has died, and your head is spinning. During this stressful time, it can be hard to know what to tackle first. You are probably wondering, “Do I need to go through probate? And now that I think about it… what is ‘probate’ anyway?!”

Probate vs. Estate Administration

“Probate” is a confusing term because it means different things in different contexts. Usually, “probate” refers to the formal court proceeding used to dispose of the specific assets that comprise the decedent’s probate estate. In contrast, “estate administration” is a broader term that often refers to any action taken to distribute the decedent’s assets to the correct recipients. Estate administration may or may not include formal probate proceedings (remember elementary school: all squares are rectangles, but not all rectangles are squares). So, while you certainly have some estate administration to work through, you may be lucky enough to avoid probate.

Sometimes, “probate” is used as a verb, as in “I went to the court to probate my Dad’s will.” In this context, you could replace “probate” with the word “record.” In Virginia, probating (or recording) a will can be done without initiating formal probate proceedings. For example, you may need to probate/record a will to memorialize an inheritance of real estate, but if the decedent had no other assets, you would not need to “go through probate.” So you may “probate” a will, but still avoid “probate.” See? I told you it was confusing.

Identify the decedent’s assets

The steps for your estate administration are entirely dependent on the types, values, and title of the decedent’s assets. Many people believe that the course of estate administration (and whether or not the estate has to “go through probate”) depends on whether or not the decedent had a will. This is not so. Everything in estate administration depends on the title, type, and value of the assets. Therefore, your first task is to identify everything that the decedent owned, what those things were worth on the date of death, how those things are titled, and if those things have any named beneficiaries. Gather as much supporting evidence as possible. Bank statements, investment statements, titles, deeds, property tax assessments, and life insurance policies will all provide critical information.

Some institutions may be hesitant to disclose this information if you haven’t already qualified as personal representative of the estate (i.e. opened a formal probate estate at the court). This creates a Catch-22 situation: you need this information to determine whether or not you need to qualify, but they won’t give you the information until you qualify. If you run into this problem, just do the best you can. Use your powers of persuasion to get as much information as possible. If all else fails, try calling again later — the person who answers your second phone call may be more helpful.

Identify the decedent debts

Understanding the decedent’s liabilities is just as important as knowing the assets. Gather as much information as you can about the decedent’s mortgages, liens, bills, credit cards, judgements, and personal debts. Organize the supporting documents and take this with you when you visit your estate administration attorney.

Calculate the probate estate

Based on the information above, you can estimate the size of the probate estate by walking through the following analysis:

  1. Assets held in trust will be disposed of according to the terms of the trust agreement. These assets are not part of the probate estate.
  2. Assets that are owned jointly with rights of survivorship with another living person are the property of the surviving owner. These assets are not part of the probate estate.
  3. Assets that have a living beneficiary designation are the property of the beneficiary(ies). These assets are not part of the probate estate.
  4. By default, Virginia real estate automatically passes to the heirs listed in the Will or, if there is no will, to the decedent’s intestate heirs. Therefore, Virginia real estate is generally not part of the probate estate (certain exceptions apply).
  5. Assets that do not fall into one of the categories above are part of the probate estate.

Determine if formal probate proceedings are necessary

If the assets in the probate estate are greater than $50,000, then formal probate proceedings are probably necessary. If the assets in the probate estate are less than $50,000, you will probably be able to take advantage of one of Virginia’s options for administering small estates.

Decide if you are the right person for the job

Even though you’ve determined that formal probate is needed, and even if you are nominated as Personal Representative in the Will, you may not want to initiate probate proceedings. If you decide to qualify as Personal Representative, you become personally liable for the proper management of the estate. There are some situations where that liability is not worth the risk.

  1. The estate is insolvent. If the decedent’s debts exceed the estate assets, the estate is insolvent. Administering an insolvent estate is particularly tricky and usually exposes the personal representative to greater liability. In addition, if all the estate assets will go to creditors, there won’t be anything left to pass to the beneficiaries. This is a lot of work and risk with very little benefit for you or the family.
  2. The beneficiaries and/or family members are difficult and litigious. As personal representative, you will have to deal with the beneficiaries and family of the decedent. If those people are toxic, difficult, and/or likely to sue you if they get upset, it may not be worth the stress and potential liability.

Implement your estate administration plan

Visit with an experienced Virginia estate administration attorney to help you craft your game plan. Do not rely on the advice of your neighbor, the teller at the bank, the billing manager at the funeral home, or even the court clerk. Unfortunately, you should not even rely on the advice of an attorney unless you know that the attorney has significant experience with Virginia estate administration. Often, these sources know just enough to get you started down a particular path, but not enough to know if it’s the right path for your specific situation. The attorneys at The Heritage Law Group have handled hundreds of estates and are eager to make sure that you get the best advice possible!