Virginia Probate: Size of Estates

Virginia probate law comes in many different shapes and sizes. An executor's obligations largely depend on the amount of assets the estate has and the amount of liabilities the estate has. An estate can be split into three categories; insolvent estate, small estate, and large estate based on these characteristics. Each type of estate has their own tax liabilities and creditor issues that you need to be aware of.

Insolvent Estates

If your relative owes more debt than the value of the estate, you have an insolvent estate. This can impact the probate of a will if there is valuable property that needs to be sold to satisfy the creditors. For example, if your relative has a significant amount of medical debt and also has a ferrari, then the ferrari may need to be sold to pay for the medical debt. This occurs even if the will says that the ferrari is to be given to a specific beneficiary.

There can be some limitations on the ability of an executor to handle the sale of the estate’s property. For example, if there is no will that grants the executor a power to sell real estate, the executor may need to petition the court for approval to sell any real estate to satisfy creditors.

Finally, various types of creditors are treated differently depending on the nature of the debt. This is called priority. Some creditors are supposed to be paid before others.

Small Estates

Virginia law makes it easier to probate estates that are valued below a certain threshold. If the value of the estate is below Fifty Thousand, which excludes some specific assets, then the estate may qualify for small estate administration. Virginia law requires you to file specific forms and follow specific procedures in order to allow for a small estate administration. When considering whether a small estate administration is appropriate, it is important to consult with a lawyer to determine which assets are counted towards the threshold value. The benefit of small estate administration is that it does not have as many administrative requirements and the timeline is much shorter.

Large Estates

In contrast with small estates, large estates can take a significant amount of time to probate. These are estates that are valued at more than Fifty Thousand. A typical estate may take as long as two years to fully probate depending on the complexity of the estate and the types of debts that need to be paid. Generally speaking, a commissioner of accounts, a public official, helps manage the probate of the estate. The commissioner is important to work with, as they have significant powers over the administration of the estate.

The commissioner is likely to require several accountings and inventories which outline the assets and liabilities of the estate. These documents must be filed timely, or the executor may be subject to certain penalties depending on the nature of the violation.

Why you need a probate lawyer.

No matter what type of estate you have, you need a probate lawyer. Failure to properly administer an estate may result in personal liability. For example, if you fail to pay a creditor or timely file an accounting or inventory, you may be on the hook for a significant amount of money. Consult with a lawyer if you have been appointed pursuant to a will to manage probate, or if you have elected to do so on behalf of a relative that  died intestate. Finally, an executor is entitled to certain compensation.

Virginia Probate: Intestate v. Testate

If a family member of yours has recently passed away or if you are planning for your future, there are a lot of different options available for passing property on to heirs. At a bare minimum, you need to be aware of the types of planning options that are available to you. The first distinction you need to be familiar with is what an estate is, and what the different types of estates are.

Many jurisdictions, including Virginia, distinguish between several different types of estates. For the purposes of this article, we will be looking at the distinction between “testate”’ and “intestate.”

What does "intestate" mean?

An estate is considered to be intestate when you have failed to create some kind of document which tells your state how you wish for your assets to be distributed. Common examples include wills and trusts. If you do not have a will or a trust, the law of the state where you last resided generally takes control.

In Virginia, these “intestacy rules” determine which of your heirs get which property. Virginia law states that, if you do not have a will and you do not have children from a different marriage, your spouse will take all of the property. However, if you have children from another marriage, those children are entitled to two-thirds (⅔) of your property, and your spouse is entitled to one-third (⅓) of your property.

In the event that your spouse has predeceased you, and all of your children are from that marriage, then your property will be split up into as many equal shares as there are children. For example, if you have three children, each child will get one-third (⅓) of your property. If one of your children predeceases you, that child’s share will then be split up into equal shares based upon the number of children that child had.

There are more rules than this, and this is just a simple example of how Virginia treats property if you do not have a will. If there is specific property that you wish to give to specific people, you must have a will or some other estate planning document.

What does "testate" mean?

Testate means you have at least some form of estate planning document, primarily a will. The purpose of the will is to direct your state on how you wish your property to be treated. There are many different types of wills. I will discussed the various types of wills in a later post.

Why you need a lawyer.

A lawyer is important for several reasons if you have a loved one who is recently deceased or if you are planning for your own future. A lawyer can help you navigate the complex probate process and determine what steps are best taken in order to distribute the property and minimize tax liability. Furthermore, a lawyer can help you prepare for the future and determine which type of estate planning document is best for you.