When a person dies, a legal process takes place (in most cases) which includes the following: It will be determined whether the will of the deceased person is valid; The assets of the deceased will be identified and inventoried; Any…
Contrary to popular belief, not everything owned by a deceased person is required to go through probate. Generally speaking, those assets which are titled in the decedent’s name only are subject to Virginia probate. These assets could include vehicles, real estate, a home, investments and bank accounts. If the decedent’s name is the only name on the title of any of these assets, only a probate court can change the name on the title to a legitimate beneficiary. There are, however, certain assets which will not go through probate, including the following:
- Assets which are jointly owned, transfer directly to the surviving owner, therefore are not subject to the probate process. This type of jointly-owned assets are known as joint ownership or joint tenancy with the right of survivorship. Unfortunately, many people who intended to add another owner to the title of an asset die before they have the opportunity, leaving those assets subject to probate. Should both owners die at the same time, the asset must go through probate before being transferred to legitimate heirs. In jointly held assets, ownership transfer occurs immediately when the first owner dies.
You may have wondered whether it is truly worth the effort to avoid the probate process which settles and distributes property according to the terms of a will. Probate is governed by state laws, and falls under the jurisdiction of probate court in the state the decedent lived in at the time of his or her death. Personal property, as well as real estate which is located in the state of residence, falls under the probate process and is overseen by the court. There are certain non-probate assets which pass outside of a will, including property owned jointly with right of survivorship. This would occur when a husband and wife had a joint bank account and one of them died. In such an instance, all rights to the bank account transfer to the surviving spouse with no need to go through probate. Life insurance and retirement benefits which pass to beneficiaries outside a will are also considered non-probate assets.
While many people have heard from others that it is a good idea to avoid probate court whenever possible, they may or may not know why they should avoid probate court, as well as how. There are two primary problems associated with probate court. First and foremost, probate can tie the decedent’s property up for months, sometimes as long as a year or more. Probate is expensive; in some states the fees associated with probate can take as much as 5 percent of the value of the estate. Probate essentially involves tons of legal forms, keeping track of all filing deadlines and other procedural technicalities. The executor as well as the attorney will receive fees from the estate, and there can be other costs such as appraiser’s fees and court costs. Given the issues associated with probate, it makes more sense in most cases to attempt to avoid probate completely. This can be done through reducing the amount of property which will be subject to probate, primarily through preparation of a living trust.
While Virginia probate is somewhat simpler and less expensive than many other states, it does require publication of the will and can lead to substantial delays in getting your assets to your beneficiaries. The basic rule of thumb with probate is that only assets which are solely owned by you (titled in your name only) must go through the probate process. The process of probate will include:
- Proving the authenticity of your will;
- Naming an executor if you have not named one in your will;
- Inventorying all your assets;
- Paying your debts and taxes;
- Identifying your heirs, and
- Distributing your property.
When you decided to make a plan for your estate, you likely prepared a Last Will and Testament, and figured your job was done. Although having a will is better than not having a will, you may not be aware…