If an individual living in Virginia passes away leaving behind his estate, which may comprise properties, their house, cars, pension funds, bank accounts, etc., their assets cannot be distributed to their rightful heirs without first going through a long and expensive probate process. The crux of a probate process is to make sure that the will and last testament of the decedent is verified and that the assets are transferred to their rightful beneficiaries.
This may take up to 12 months to complete and can be a bit heavy on the pocket. In Virginia, however, there is an additional factor you should also consider, and that’s a probate tax. However, while probate is generally required for transferring property after the death of a decedent, there are some legal parameters that may enable an individual to streamline the process or even steer clear of probate, entirely.
Understanding Probate
While a probate process is essentially put in place to help ensure that the decedent’s wishes are met without any issues, it can involve a variety of factors, such as:
- The personal representative (executor) or any named beneficiaries must prove the will is authentic.
- The will must include the name of a personal representative.
- It must be ensured that any liabilities, debts, and taxes owed by the decedent are fully paid.
- The personal representative must hand over the necessary tax return documents of the decedent.
- Making sure that the assets and monies of the decedent are transparently distributed to the named heirs without any complications.
How You Can Potentially Escape the Probate Process in Virginia: Some Excellent Options
The state of Virginia has provided individuals with legal tools they can use to avoid the probate process. Let’s briefly understand what those tools are.
Living Trusts
A typical strategy you can use to escape probate in Virginia is developing a living trust. Simply put, a living trust will enable you to pool and park all your assets in a trust. The trust will then be supervised by a trustee that you will choose to give your beneficiaries an advantage. One of the best benefits of a living trust in this situation is that when you pass away, your assets will automatically be transferred to the named heirs without any probate.
Jointly Owned Property or Tenancy Ownership
Another legal way of passing down your assets to a beneficiary is owning a property jointly. This is where both you and your spouse will own the house or any other real estate together in your name. If you pass away, any jointly owned properties will automatically be transferred to your spouse’s name. In addition, Virginia has provided different types of jointly owned real estate that can avoid the probate process.
These essentially include a joint tenancy, which is where you and your spouse or any other family member or friend own a house or other property together, and a tenancy by the entirety, which can only be used by married couples and comes with the same benefits.
POD Bank Accounts (Payable-on-Death)
To make your cash at the bank secure from the probate process, you can use another legal tool known as a POD (payable-on-death). In the case of a bank account, if you transform your accounts into PODs, you can mention the name of the beneficiary who will have a rightful claim to the money upon your passing without any worries of probate.
TOD for Securities and Investments (Transfer-on-Death)
If you have investments, securities, bonds, pension funds (such as a 401k), brokerage accounts, etc., and want to help your beneficiaries steer clear of the Virginia probate process upon your passing, you should consider adding a TOD (transfer-on-death) clause on your investments and securities.
It is a simple and legal way for individuals who have a very diversified and cash-rich investment in stocks and other types of trading instruments. In addition, you’d be glad to know that even with a transfer-on-death registration for assets, you will still be in control of your investments for as long as you are alive. Plus, you will also have a flexible opportunity to change or rename your beneficiaries.
TOD Deeds for Commercial or Private Real Estate
It is important to keep in mind that a transfer-on-death (TOD) registration can also be applied to your home or commercial property deeds in Virginia. It is also a very simple and effective strategy to escape the complexities and technical nuances of the probate process. The TOD for real estate deeds is completely legal and enables the owner to name a verifiable heir or beneficiary(s). Upon your passing, those property deeds will automatically be passed on to your beneficiaries.
However, it is vital to note that a TOD deed is different than a conventional deed in the sense that a TOD on your properties will only be activated once you pass away. But it does not take away the owner’s control over their properties. This means that you can buy and sell your real estate as per your wishes, and you will not need to seek any reassurances or permissions from your named heirs.
Small Estate Affidavit
A small estate affidavit is for those testators who do not have any significant estate. However, they must have an authenticated will stating the total value of their estate. If the value amounts to $50,000 or less, their assets will not be subject to a probate process, and any heirs or beneficiaries will be able to claim the estate with ease. However, for the small estate affidavit to go into effect, the beneficiaries will need to wait for two months after the decedent passes away.
Transfer-on-Death for Registered Vehicles
In Virginia, testators can also use a TOD registration for their vehicles, automatically having the titles transferred to the beneficiaries upon their passing without worrying about the probate process. It is a very simple process and should be a part of a testator’s estate planning process. In addition, it also shows that Virginia law does grant ample probate relief to individuals, providing flexible tools and strategies.