When you die, you want to leave your loved ones in a good financial position and minimize the complications they face regarding accessing the property and assets you have left to them. Taking steps to reduce probate in Virginia can ensure a quicker process of accessing your assets and property for your beneficiaries.
Probate can be a complex and time-consuming process. Losing a loved one is an emotional time, and the last thing anyone wants to deal with while processing their grief is additional bureaucracy. An experienced Virginia trusts and estates lawyer from our firm can help you understand how to avoid or reduce probate in Virginia. Contact us today.
What Is Probate?
Probate is the process Virginia uses to oversee the distribution of someone’s estate after their death. A probate court handles the probate process and involves:
- Proving that the last will and testament of the deceased is valid
- Appointing a personal representative
- Ensuring payment of the decedent’s debts and bills
- Submitting and paying their final tax returns
- Ensuring that the decedent’s property and assets are distributed to the beneficiaries, per their wishes.
Depending on the size and complexity of the estate, probate can take as little as a few months or as long as several years.
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Is It Possible to Avoid Probate in Virginia?
It is nearly impossible to avoid probate in Virginia completely. However, you can take steps to reduce the number of assets that need to go through the process. Many people have a negative view of probate. It may stem from a personal experience or from horror stories you’ve heard from friends.
In Virginia, an estate will need to be probated when a person dies with property valued at more than $50,000. So, to avoid probate, you must either have a very small estate or take steps to ensure that your assets transfer automatically to beneficiaries.
Fortunately, there are steps you can take to help reduce the size of your estate prior to your death and ways to permit various assets to avoid the probate process. Even if you don’t entirely avoid probate, taking steps to reduce probate can significantly speed up the process while allowing immediate access to certain assets while waiting for the probate process to conclude.
Steps You Can Take to Avoid or Reduce Probate in Virginia
There are various steps you can take to help reduce the number of your assets that will need to go through the probate process following your death and make things easier for your beneficiaries. The more you can do to reduce probate for your beneficiaries, the easier it will be for them to access your assets and minimize their legal obligations.
Consult a Virginia Trusts and Estates Lawyer
The best way to avoid or reduce probate in Virginia is to work with an experienced estate attorney. Your lawyer will itemize and analyze your assets, listen to your plans, ask the right questions, and help you create the documents that will fulfill your wishes now and after your death.
There are a variety of options available when you are working to avoid or reduce probate. When you work with an experienced estate lawyer, they will thoroughly explain all available options for avoiding or reducing probate and help you find the path that best suits your goals.
Whatever option you choose, your lawyer can help you with all the legal complexities to ensure that everything is set up to leave your beneficiaries in the best possible possible following your death.
Create a Revocable Living Trust
A revocable living trust is created during your lifetime. You transfer your assets, such as your home, vacation home, cars, bank accounts, investment accounts, etc., into the trust and manage and use them while you are alive.
To establish a revocable trust, you will need to create a trust document outlining how the trust will be managed and how the assets held by the trust will be distributed upon your death. You will typically serve as the initial trustee, maintaining full control and access to your trust during your lifetime.
Upon your death, a named successor trustee takes over the trust and distributes your assets to your beneficiaries per your wishes, usually within weeks. Because the trust legally owns the assets, nothing contained within the trust will have to go through probate. A revocable living trust is a flexible document that can be changed or even revoked at any time.
Add Beneficiaries to Appropriate Accounts
One effective way to bypass probate and ensure your assets are distributed according to your wishes is to name direct beneficiaries on your financial accounts. This includes accounts such as:
- Bank accounts (checking, savings, money market, CDs, etc.)
- Retirement accounts (401(k)s, IRAs, pensions, etc.)
- Investment/brokerage accounts
- Life insurance policies
After your death, the money in these accounts passes directly to your named beneficiaries without having to go through probate and can be used immediately.
The process for adding beneficiaries is usually straightforward. You simply need to fill out a beneficiary designation form provided by the financial institution. Typical information required includes the beneficiary’s full legal name, contact details, and relationship to you.
Working with an experienced estate planning attorney can help ensure your beneficiary designations are structured optimally to bypass probate and align with your overall estate plan. Proper beneficiary management is a critical component of an effective probate avoidance strategy.
Transfer or Payable on Death Accounts
Transfer on death (TOD) and payable on death (POD) accounts are similar to adding a beneficiary to your accounts. With these accounts, you can designate a beneficiary who will automatically receive the assets in the account upon your death, bypassing probate.
With a TOD or POD account, you name one or more beneficiaries who will inherit the assets in the account when you pass away. This is done by completing a beneficiary designation form with the financial institution. You retain full control over the account during your lifetime and can change the beneficiary designation at any time as long as you are of sound mind.
It’s essential to ensure these beneficiary designations align with the provisions in your will or living trust to avoid any conflicts in your overall estate plan. Since the account assets transfer directly to the named beneficiary, they are not considered part of your legal estate when you die and are able to avoid the probate process, saving your beneficiaries significant time and money.
Joint Tenancy With Right of Survivorship
To ensure that real estate does not have to go through probate, joint tenancy with right of survivorship (JTWROS) allows you to change your sole ownership of a piece of property to a joint ownership with one or more parties. JTWROS will enable the other owner or owners to take control of the property immediately upon your death since the title will remain with them.
When you enter into a JTWROS arrangement, you and any other owners will each have 100% ownership of the asset. When one of the joint tenants passes away, their ownership share automatically transfers to the surviving joint tenant or tenants. The asset will not be subject to probate as it will already be an asset owned by the other parties in the JTWROS agreement.
When setting up a JTWROS, it is important to remember that you are not simply designating who will take over the asset upon your death but are instead entering into an arrangement where your ownership in an asset will be immediately divided, giving up sole ownership during your lifetime. An experienced estate planning lawyer can help ensure this aligns with your goals.
Transferring Property Before Your Death
You may begin gifting property like jewelry, collectibles, and art, as well as money, prior to your death. Since you never know how your financial situation may change in the future, it may be best not to gift significant amounts of money now. Virginia tax laws allow you to gift up to $14,000 in assets annually to each beneficiary without gift tax collection.
Transferring property before your death can come with risks. If you transfer too much too quickly, you can put yourself in a challenging financial situation should you live longer than you expected.
However, there are also many benefits to transferring property before your death. While doing so can help these assets avoid the probate process, it can also allow your beneficiaries to enjoy property that you may no longer be using while you are still alive.
No-Contest Clause
A no-contest clause will not enable you to avoid probate but can prevent your will from being drawn into a long and ugly probate process. If a beneficiary contests your will, they will be risking their inheritance. The no-contest clause states that if the challenge is unsuccessful, they will forfeit their inheritance.
Including a no-contest clause in your will helps ensure that your estate is divided in the manner you desire rather than potential changes being made that go against your wishes. This clause can also help reduce conflict following your death, as your beneficiaries will be far less likely to engage in an expensive and contentious legal battle over your estate.
A no-contest clause can significantly reduce probate in Virginia, as will contests are often lengthy. It can create delays to probate that prevent your beneficiaries from accessing the assets you left to them for years after your death.
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Avoiding or Reducing Probate Is One of the Best Ways to Help Minimize the Burden on Your Loved Ones After Your Death
Probate is a stressful, expensive, and time-consuming process. The probate process can create a significant burden for your loved ones, especially while they are dealing with grief over your passing. Furthermore, it can be difficult for a person with a full-time job to devote the time and energy needed to deal with lawyers and the court.
The fees accrued for legal representation and administrating the estate can grow quickly and must be paid in full before any distribution of the estate to your beneficiaries. That may mean that assets won’t go to beneficiaries but will instead need to be liquidated to cover fees.
A reduced probate process will allow more of the money and assets you left to your beneficiaries to reach them rather than being used to pay various legal fees. A Virginia estate and tax planning lawyer can put you in the best possible position to reduce probate and ensure the best outcome for your beneficiaries.
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How an Experienced Estate Planning Lawyer Can Help You Avoid or Reduce Probate in Virginia for Your Loved Ones
Melone Hatley, P.C. is a family and estate planning law firm serving areas throughout Virginia with additional offices in North Carolina and Florida. Our philosophy is to provide all our clients with the highest quality legal representation, innovative legal solutions, and unsurpassed dedication to customer service.
Through our high standards, we strive to be a trusted resource to our clients. We know from experience that a successful attorney-client relationship depends on our ability to understand your needs and objectives.
For more information about how to avoid or reduce probate in Virginia, contact our office today and schedule a free case review with a Client Services Coordinator. While on our site, check out our client testimonials to learn more about the service we provide to our clients.
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