In the state of Virginia, the probate process is a legal process that occurs after a person dies. During probate, the circuit court will decide how to distribute your property/estate.
If there is a will, the circuit court will determine if it is valid under Virginia law as well as to review the validity of the distribution to the heirs.
"Testate" means that when someone dies, there is a will that directs how the estate will be handled and ultimately distributed during the probate process.
Usually, in Virginia, a will is witnessed by two people which attests to the competency of all the parties. There is also the option of a "self-proving affidavit" which is an instrument to prove that the will is properly put together and witnessed. Ultimately, the self proving affidavit eliminates the need for witness testimony when the will goes to probate.
"Intestate" means that when someone dies, there is no will. Virginia estate management laws will guide the probate proceedings regarding who inherits the estate.
First, the will must be proved to be the valid last will and testament of the deceased party.
Once validated, a complete inventory of the estate will be taken followed by an appraisal of the estate.
All debts and taxes of the deceased - including court and legal fees accrued during probate - will be paid from the estate before final distribution of the remaining estate to the heirs.
The first step is to name an executor. If there is a will, this person will be a beneficiary of the estate or named in the will. If there is no will, the court will appoint an administrator to manage the estate while it is in probate.
If an administrator is appointed, they will be required to take an oath to perform all required duties honestly and efficiently. They will also have to provide a surety bond in the amount equal to the value of the estate. If the administrator is a beneficiary of the will or if they are an employee of a financial institution, the surety bond may be waived. Non-Virginia resident administrators will require a surety bond.
Once the administrator accepts the position, they have 30 days to give advise or give notice to the beneficiaries/heirs.
If the estate is valued at $50,000 or less, an executor is not required.
Probate must be filed for in Circuit Court located within the city/county of the deceased once the executor/administrator has been appointed.All this means is that the executor or administrator needs to provide an original copy of the will as well as a death certificate. This is normally done within 30 days of the passing of the deceased, although there is no deadline for filing for probate.
Normally, probate is handled by the clerk of the circuit court. If there is an appeal, a judge is appointed. Appeals must be presented to the clerk within 6 months of probate filing.
A commissioner of accounts (attorneys appointed by circuit court judges to provide "general supervision of all fiduciaries admitted to qualify in the court or before the clerk of the circuit court and shall make all ex parte settlements of the fiduciaries' accounts) is appointed to ensure that the executor is appropriate following the probate process. The fees for the commissioner are established by the court and will vary from case to case.
An inventory of property and assets must be taken by the executor in order to establish the gross estimated value of the estate. Assets include cash, savings, stocks, securities, bonds and any other monetary accounts owned by the deceased. They also include personal property like real estate, insurance, jewelry, businesses, vehicles, artwork, etc.
The inventory must be completed and filed within 4 months of filing for probate.
Once the estate is inventoried, the assets are appraised by the court so that the estate can be given a gross estimated value. All debts including outstanding debts, taxes, court and legal fees, assets for distribution to the beneficiaries of the estate, compensation of the executor (not to exceed 5% of the total value of the estate) are deducted from this value.
In some cases, the estate is not enough to cover the debts against it. Under these circumstances, the beneficiaries can decide if the want to sell the estate to pay the debts. All creditors and beneficiaries must be notified of the probate filing.
Creditors have 6 months from the time of the probate filing to collect debts against the estate before forfeiting rights to repayment of debt. Relatives have 6 months from the time of filing to refuse the inheritance.
Relatives have the ability to contest the will if they feel the are not being treated fairly in the division of the estate. In some cases, a will may include a "no-contest clause" which means that if the will is contested and the beneficiary is unsuccessful, the beneficiary will forfeit their share of the inheritance. If this happens, the inheritance goes to the alternate beneficiary or reverts back to the original estate for distribution among the remaining beneficiaries.
In Virginia you must file Virginia probate tax, Virginia state tax, Income tax of the and personal property tax of the deceased (for the year of the death), Virginia income tax return (for the year of the death), Virginia estate tax return (for the year of the death - and ONLY if the estate exceeds $50,000 in net value), and federal taxes.
All of these taxes are assumed by the state as liabilities and must be paid from the proceeds of the estate.
The remaining assets - once the taxes and debtors are paid - are distributed among the beneficiaries. If the debts of the estate require a sale of some or all of the estate, the terms of the will will be re-evaluated to compensate for the debts which must be paid.
image.gifThe timing can take months or years. The process is subject to getting a full inventory of the estate from the executor, an appraisal of the entire estate, debts and taxes owed to be reduced from the net worth of the estate, and the organization of the estate's distribution to the beneficiaries. Each of these processes can take months to years to complete. The organization and efficiency of all of these milestones being met makes the process go faster.
The cost of probate is determined by the cost of hiring an attorney, compensation of the executor/administrator, court filing fees and the cost of hiring an appraiser. If the estate cannot cover these costs, it will become the responsibility of the beneficiaries.
If there is no will, the estate will pass on to a living spouse, children/grandchildren, living father and/or mother of the deceased, or siblings of the deceased. If one of the qualifying beneficiaries is dead, the estate will pass on to the next in line of succession.