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.
This means that even if a person’s will states they want their share of the jointly held asset to go to their children from a prior marriage—or anyone else—and that person dies first, the asset belongs 100 percent to the joint owner. Many, many people are surprised to learn this. Because second (and third and fourth) marriages with children from prior marriages are so common, many people believe that by naming their children as heirs of their half of the jointly-held property, the situation is taken care of. This is simply not true, and many children have been left disinherited as a result.
Another type of joint ownership is tenants-in-common, which does allow a person who dies first to bequeath their share of jointly held assets to children from a prior marriage—or anyone else designated. While this allows people to more fully control who will receive their share of jointly-held assets upon a death of one of the owners, probate is necessary.
Beneficiary designations are not subject to probate. These beneficiary designations include such assets as retirement plans, some bank accounts, IRAs and insurance policies. In theory, upon death, these types of assets are directly paid to the designated beneficiary without the necessity of the probate process. There are exceptions to this rule, including:
When a beneficiary dies prior to, or at the same time as the decedent, the assets must go through probate.
Should a beneficiary become incapacitated, the Virginia probate court will likely take control of assets through guardianship or conservatorship. Courts will generally insist on court supervision due to the fact they will not knowingly pay an incompetent person.
If “my estate” is listed as beneficiary in the decedent’s will, the assets must go through probate in order to determine who is included in that term.
A minor, named as beneficiary, will require the probate court establish guardianship.
Finally, any assets held in a trust, such as a revocable living trust, are not subject to the probate process, however simply putting a trust into your will (known as a testamentary trust) will require probate before the trust can go into effect. Assets not included in the living trust will also go through the probate process.
If you have questions regarding the Virginia probate process, speaking to an experienced Virginia estate attorney could be extremely beneficial. Your estate attorney can assist you in setting up your estate so the people you want to receive your assets, actually do so.