Avoiding Probate in Virginia

Many people believe that having a Will can enable their estate to avoid probate. But, that is simply not true.

While a Will is an important part of an estate plan, there is one major drawback to having all of your assets pass under the terms of your Will. That drawback is that your property will then have to go through probate before your loved ones can have access to them.

Probate is the legal process through which a court oversees the resolution of claims against your estate and the distribution of your property after you die. It can be a very public, lengthy, expensive, and inconvenient process that you generally want to avoid. Here are some of the reasons why:

1. Probate can take months to years to complete – If your estate is very large or complex or if there are disputes among your beneficiaries the process can become quite lengthy.
2. For privacy – Probate proceedings and the information regarding them are a matter of public record. So, if you are concerned about maintaining privacy, you may wish to do whatever you can to avoid probate.
3. To save the cost of probating your estate – Besides the court fees, other costs involved in probate administration include attorney fees and accountant fees.
4. To prevent the possibility of any Will contests or disputes among your loved ones over the contents of your Will or the distribution of your estate.

Probate Avoidance

When it comes to the idea of avoiding probate, the main objective is to convert as much of your probate property as possible into non-probate property.

Probate property, as the term suggests, is real or personal property that will be subject to probate after your death. Thus, non-probate property is real or personal property that will not be subject to probate and can pass on directly to an heir or beneficiary.

Non-probate property is NOT:

• Distributed according to your Will;
• Distributed pursuant to the state’s intestate succession statute;
• Subject to the administration of your estate after you die; or
• Subject to the claims of your creditors

Converting Probate Property Into Non-probate Property

There are a number of ways that you, working with an experienced Virginia estate planning attorney, can avoid probate by converting probate property into non-probate property. Here are the most commonly used methods:

• Joint ownership – own and hold real and personal property jointly with rights of survivorship. Here the benefit for estate planning purposes is that after you die, your share of ownership will pass directly to the remaining joint owner(s) without the need for probate.
• Create a Trust – create a living trust and transfer your real and personal property into it. A trust is perhaps the easiest and most popular probate avoidance mechanism. Once you transfer property from your name to the name of the trust that you own, it is no longer considered part of your estate and can be disbursed to your heirs after you die, without having to go through probate first. However, you must remember to fund the trust with your assets for it to do what you intended it to do.
• A Totten Trust – place money into a bank account as a Totten Trust. This is a type of revocable trust, also known as a “payable on death account”, allows the funds in the account to be transferred directly to a beneficiary when the owner dies, thereby avoiding probate. A Totten trust can be used with bank accounts and other financial accounts, but cannot be used to transfer real property.
• Beneficiary Designations – retirement plans, annuities, and life insurance policies usually allow you to designate beneficiaries who will inherit the asset in the event of your death. Beneficiary designations are also a common feature of employee benefits contracts, securities, savings bonds, and most other liquid assets. Additionally, Virginia allows you to designate a beneficiary on vehicle registrations and certain real estate deeds.
• Make gifts – make annual gifts to others in amounts that do not exceed the limit set by the IRS. Gifting property to your loved ones while you are alive is a great way to prevent them from having to go through probate to gain access to those assets after you die. Remember, if it’s not owned in your name when you die, it’s not part of your estate and will not have to go through probate.
• Simplified Probate Procedures – If you fail to do any of the above and your estate is small enough, it may still be eligible for one of Virginia’s simplified “small estate” probate procedures. This will allow your heirs to skip probate altogether and inherit assets simply by preparing an affidavit and presenting it to the bank or financial institutions where the asset is held.

With each of the options presented above, the non-probate property will pass directly to the named beneficiary or the surviving joint tenant by operation of law after you pass away. So, if all of your property has been converted into non-probate property, then probate can presumably be avoided because probating your estate will not be necessary.

Contact an Experienced Virginia Probate Attorney

The bottom line is if you successfully convert all of your assets into non-probate property, probate can be avoided. Whether or not avoiding probate is a good idea for you will depend on the nature of your estate, it’s size, the assets it contains, etc.

An experienced Virginia estate planning attorney will be familiar with the difference between probate and non-probate property and also be sensitive to the reasons why you may wish to avoid probate. Contact us today to learn how we can help.

Contact Speedwell Law at (703) 553-2577 or use the contact form on our website.

The information on this site is for general informational purposes only. The information presented in this site is not legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this site.