In my practice, estate planning is composed of two areas. One area is the effective planning of the estate prior to death to meet the desires of the client. The second aspect of my practice is counseling clients after the death of a loved one to aid in the distribution of assets and settling of debts, otherwise known as probate administration. However, many people end up going the probate process without the aid of an attorney and I thought a short primer on the basics of the Virginia probate administration would help those people that go it alone in administrating an estate. While the administration process in D.C. (and Maryland) are similar I’ll focus on Virginia for now, and, I will address the probate administration in those two jurisdictions in future posts.
In this post, I will cover what probate is and isn’t and what estate assets probate covers and estate assets it doesn’t cover.
Probate is the legal process by which a Will is deemed valid or invalid. If a decedent leaves a Will distributing estate property and assets, the probate court will determine if the Will should be admitted to probate and given legal effect. The probate process involves collecting the decedent’s assets, liquidating liabilities, paying necessary taxes, and distributing property to heirs and allowing creditors to make claims on the decedent’s estate. In short, it is the paying off of debts of the estate and retitling the remaining assets from the decedent’s name into the beneficiaries’ name.
There is a misconception by the general public that probate and the probate court have control over all of the assets of a decedent’s estate. That is incorrect. Probate only has control over probate assets and has no legal power over non-probate assets. That seems a little obvious. But the question I get the most is what assets are probate assets and what are non-probate assets?
A probate assets is anything held solely in an individual’s name at the time of death. It could be a bank account with only the decedent’s name on it. Or it could be a piece of real estate, like a home residence, with a deed titled only in the decedent’s name. It is any asset that after the decedent’s death you can not determine what beneficiary should receive an ownership interest in the asset. You must look to the decedent’s will, and to the probate process, to help make a determination on ownership.
Non-probate assets, such as an insurance policy or bank account with an identified beneficiary, become the property of the beneficiary immediately upon the death of the person who owned the asset. Assets owned in either joint tenancy with right of survival or tenancy by the entirety (click here for more information on joint tenancy) where the surviving owner of the property takes ownership of the asset upon the decedent’s death are also non-probate assets. The existence of a will is irrelevant to those assets because you know who receives the ownership interest in the asset. Non-probate assets will not become part of the decedent’s probate estate and probate administration will have no control over those assets.
Simply understanding what assets belong in probate and what the process entails will make the probate administration that much easier for the person administrating the probate and the probate court. In future posts, I get dive into the process of administrating an estate in Virginia and dealing with the Commissioner of Accounts.