Can a Lengthy Probate be Avoided

What have you heard about the probate process? That it’s a long, expensive process that should be avoided at all costs? That it wasn’t so bad after all? The reality is that both scenarios can be true. It simply depends on how complicated and extensive an estate is.

Some estates are so small they don’t even require probate. Others are quite large, requiring deliberate and careful legal planning to avoid a probate disaster. In either case, you might want to arrange your estate to avoid probate for a variety of reasons ranging from a lack of available cash flow for your heirs to a lack of privacy regarding your personal affairs. Whatever your reason, probating a small estate is a much simpler and faster process in Virginia than a lengthy full probate with all of its statutory requirements. What if you could structure an estate plan to avoid probate and have assets move directly to your heirs? You can!

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Under Virginia Code Section 64.2-601, when the total estate does not exceed $50,000, a successor in interest, typically an heir-at-law or a beneficiary of the Will, can collect and distribute the assets without having to go through the full probate process. If there is a Will, it must be admitted to probate, but an executor or personal representative does not need to be appointed. This is known as “putting the Will to record” or recording the Will.

To claim the assets without being appointed executor or personal representative, the person collecting the assets must provide an affidavit (an Affidavit of Collection) signed by all the lawful successors in interest stating that:

  1. The total estate does not exceed $50,000;
  2. At least 60 days have passed since the decedent’s death;
  3. No application for the appointment of an executor or personal representative is pending or has been granted in any jurisdiction;
  4. The Will, if there is one, has been admitted to probate;
  5. The claimant is entitled to collect the assets and the basis of entitlement;
  6. The names and addresses of all other successors in interest;
  7. The name and addresses of the successors designated to receive the assets on behalf of all the successors;
  8. An acknowledgment that the claiming successor has a fiduciary duty to safeguard and promptly pay the assets to the law successors in accordance with Virginia law.

While an executor or personal representative is not required to be qualified on a small estate, many attorneys advise potential personal representatives or executors to do so. Doing this gives the executor or personal representative the Letter of Qualification he or she will need to collect the assets and take any other action for which a Letter of Qualification may be necessary, such as accessing a safe deposit box or liquidating stocks, bonds or other assets titled in the decedent’s name.

This process for a small estate is much simpler than that of a full probate proceeding. Probate of an estate that exceeds $50,000 requires an executor or administrator, depending on whether there was a Will or not, be qualified to administer the estate of the decedent thereby accepting personal liability. The executor or personal representative is then responsible for filing an inventory after four months from their qualification date as well as a final accounting to the relevant commissioner of accounts after 16 months from qualification. But this can be avoided as long as the decedent’s estate is under $50,000. If the estate is under $25,000 an affidavit of collection isn’t even required.

This does not mean gifting away everything you have worked hard for or that your estate is of little value. It simply means that your assets, whatever they are, are titled in such a way that they can pass directly to the intended beneficiaries on your death, thereby never becoming a part of your estate. This can easily be accomplished with planning and foresight. 

For example, Transfer on Death deeds (TODs) can be prepared for real property, so that on an individual’s death it automatically passes to the person named in the deed. Payable on Death (POD) beneficiaries can be named on bank accounts, stocks, bonds, life insurance policies, etc., so that the asset becomes payable to a beneficiary on the death of the owner. Real property and accounts can be titled “joint with the right of survivorship” (most married couples who own a home or bank account have joint title with right of survivorship). On the spouse’s death, that property automatically becomes the property of the other. You could even set up a Trust and have your assets titled to the Trust itself, so that upon your death the assets aren’t subject to probate.

All of these options are a means to bypassing probate, meaning a simpler and quicker process for your loved ones during a difficult and emotional time. This type of estate planning is easier to accomplish than you would think. If you are interested in creating a structured estate plan to avoid probate be sure to talk to an attorney who can advise you on your state’s laws as the requirements vary from state to state.

Ask Kit Kat: Sharks in Winter

Hook Law Center: Kit Kat, are there really sharks off the Outer Banks in North Carolina in the winter?

Kit Kat: Well, not usually. Most sharks winter in warmer waters like Florida. However, a small number don’t migrate at all. Also, some females only migrate south every other year, due to exhaustion from birthing shark pups, according to Tyler Bowling, program manager of the International Shark Attack File at the University of Florida. So, a shark biting a surfer on the foot in Rodanthe, NC in mid-January was extremely unusual. It was the only the 2nd attack in winter off NC ever, the first in January, and there had been a gap of 20 years between the two.

The bite in January was by a small blacktip shark. Gavin Naylor, program director of the Int. Shark File, suspects it was due to unusually warm temperatures in January off the NC coast. Most of this species depart for Florida at this time of year. According to the Int. Shark File, the United States in 2019 had the most shark attacks worldwide—21 in Florida, 9 in Hawaii, 3 in both NC and California. Australia came in second with 11 bites. Naylor comments, sharks don’t hunt out humans. They’re usually just looking for food. He says, “If one does bite a person, it’s often young and still trying to figure out its prey. When they target a fish, they chomp and swallow. When they bite a human, they typically let go.”

For those who vacation in North Carolina, beware of the summer months. Over the past 20 years, there have 56 bites in all, according to the Int. Shark File.  July led with 23, and June and August divided the remaining 33. Mostly, though, the sharks stay a bit off the coast. They are mostly likely to be where people do deep-sea fishing. Sometimes, there are dramatic stories of sharks jumping at large fish caught from charter boats, cutting the fish in half. Staying alert to your surroundings is key. We must share the beautiful ocean with all of the world’s creatures. (Jeff Hampton, “Outer Banks shark bites are rare in the winter; last week’s is only 2nd on record,” The Virginian-Pilot, January 23, 2020)

Posted in Senior Law News