Probate is the process that your estate must go through if you die with or without a will in Virginia. Wills are probated in the circuit court in the city or county where the deceased person (called the “decedent”) resided before his or her death. Probate can also refer to the process of qualifying someone to serve as the personal representative (or administrator, if there is no will) who will carry out the terms of the will and administer the estate of the decedent.
Many of our clients who come to us without an estate plan are surprised to learn that, in fact, they do have an estate plan! If you die without an estate plan, Virginia’s laws of intestacy will determine who your heirs are and who receives your property after you die.
How Can I Avoid Probate?
Going through the probate process is lengthy (the process typically takes 12 to 16 months), expensive (filing fees and attorney’s fees are usually involved), and it is a public process. For these reasons, many people choose to avoid probate. If the estate is small (under $15,000) or if there is no property passing under the will, there is usually no need to go through probate.
Alperin Law can give you several legal strategies that will allow you to pass property after you die without requiring that your estate go through probate.
Joint Tenancy & Tenancy by the Entirety
Adding another person to your assets as a joint owner or “joint tenant with rights of survivorship” will allow your property to pass to them upon your death without going through probate. When combined with “rights of survivorship,” this asset passes automatically to the joint owner upon your death without the need to go through probate. However, there are some pitfalls to this strategy. In Virginia, each owner owns an equal share of an asset when there is a joint tenancy. This means that the joint owner will have access to your assets while you are alive. Also, if there are claims (such as lawsuits) against the co-owner, this asset will be available to that person’s creditors.
Virginia allows Transfer on Death (TOD) or Pay on Death (POD) beneficiary designations to be added to bank accounts. Beneficiary designations like these are preferable to joint tenancy in that they allow you to transfer property upon your death without giving away current ownership. One of the drawbacks, however, is that if one of your children is listed as a beneficiary on one of your assets while the other children are not, that child will be entitled to all of that asset without including the other children. Additionally, understand that if you have beneficiaries listed on your assets, those assets will be distributed upon your death to the listed beneficiaries, even if your last will and testament states otherwise.
Revocable Living Trust
A Revocable Living Trust is a legal document that allows you to establish a separate entity (the trust) to hold legal title to your assets while you are alive and to name trustees to manage those assets according to the trust terms. Typically, you serve as the trustee while you are alive, managing your assets for your own benefit. Upon your disability or death, the trust terms name your successor trustee to continue to manage — or distribute — the assets held in trust. A properly drafted trust can accomplish many goals, including guardianship and probate avoidance for your estate and creditor protection for your children.
More Information About Virginia Probate
The Virginia State Courts publish a helpful brochure overview of Virginia Probate procedures: “Probate in Virginia.”
Virginia Estate and Trust Administration
A properly drafted and funded trust will generally avoid probate. The trust need not be filed with the probate court. Nonetheless, there are still steps necessary to administer the trust: beneficiaries must be contacted; assets must be gathered, valued and managed; potential creditors must be notified; debts, taxes and final expenses must be paid; and, ultimately, any remaining income and assets must be distributed in compliance with the trust terms. Successor trustees often lack the time, resources or knowledge to personally administer the trust, and therefore may call upon legal, accounting and investment professionals for assistance. Alperin Law can help your successor trustee(s) deal with the complexities of administering your trust. Please call our office and we’ll be happy to schedule a consultation, whether or not our office has drafted the original trust.
Most of our clients come into our office thinking that all they need is a simple will and that trusts are only something that wealthy people should consider. This is far from the truth – a trust can be an important legal strategy that allows you to protect your assets from a variety of legal and financial issues that may arise throughout your lifetime.
What is a trust?
A trust is an agreement through which money and other assets are held and managed by one person for the benefit of another. Trusts are known as will substitutes – the provisions of the trust document, rather than your will or state law, will determine what happens to your assets upon your death.
A living trust is one that you create during your lifetime. The person who creates the trust is called the grantor. Living trusts can be revocable (subject to change or termination) or irrevocable. There are many different types of trusts, which are created in order to accomplish a variety of goals. Each trust varies in the degree of flexibility and control it offers.
There are many possible benefits to establishing a trust, including providing financial safeguards for family and other beneficiaries, postponing or avoiding unnecessary taxes, and establishing a means of controlling or administering property if you become incapacitated or pass away.
Many parents wish to plan for the possibility that they may pass away before their children are old enough or responsible enough to manage their inheritance. If you die without a trust or will, the Commonwealth will distribute your assets according to the default provisions of Virginia law. This means that minor children will need a court-appointed legal guardian to manage their inheritance for them. In order to avoid this process, many of our clients make their assets payable to a trust upon their death. This allows the assets to be held and distributed in the same manner as other trust assets, and may protect these assets from creditors’ claims.
On the other hand, many of our clients are retired or approaching retirement, and are concerned that they may need long-term care at some point in the future. With the cost of long-term care constantly on the rise, most people cannot afford to pay out-of-pocket for this type of care. Some people may need Medicaid assistance, while others might qualify for veterans’ benefits. However, neither of these benefits is available unless you have a very small amount of assets left in your name. The experienced estate planning attorneys at Alperin Law can help you to avoid “spending down” all of your assets before you qualify for these benefits. One of the many legal strategies that we can help you implement is the establishment of an irrevocable trust, which can shield your assets for Medicaid and VA benefits eligibility purposes.
A trust can be an important aspect of your estate plan. Unfortunately, it also can be the most complicated and confusing part of planning for the future. If you do not create a trust properly or fail to fund your trust in the correct way, there can be devastating consequences that could delay your access to financial aid for long-term care – if not prevent you from receiving benefits altogether. For these reasons, it is important that you meet with an experienced estate planning and elder law attorney who is familiar with the legal and financial strategies that will work the best to meet your goals for yourself and for your family.
For a no-cost phone consultation, feel free to call us at (757) 490-3500.