Probate and Estate Administration

Question 1

non probate property / assets

Answer 1

non probate transfers can be effected via CONTRACTS (life insurance, employee benefits), bank accounts (joint or payable on death), inter vivos trusts, deeds, property passing by right of survivorship, and various other written instruments (bonds, securities, promissory notes, etc.)

such techniques are usually used to avoid probate so that the property will not be governed by a decedent’s will or intestacy rules

Question 2

non probate assets - can they be disposed of by in a will?

Answer 2

A will cannot make a gift of nonprobate assets (that is, interests that pass at death other than by will or intestacy).

Question 3

what are nonprobate assets?

Answer 3

will subsitites that pass pursuant to the instrument that creates them OR assets exempted from probate

wills substitues:
- life insurance, bank accounts, inter vivos / living trusts, Joint tenancy with right of survivorship, pOD bank accounts, employee benefits/pensions

Question 4

some non probate assets ARE included in the estate’s inventory

Answer 4

Nonprobate assets are NOT included in the estate’s inventory, EXCEPT for joint accounts, payable on death (“POD”) accounts, and Totten trusts.

Only the decedents interest in a joint account is included in the inventory, but the entire amount of POD account or Totten trust must be included

even though they are included in inventory - these assets do not become part of the decedent’s probate estate, UNLESS:
1) the probate estate is insufficient to pay debts, taxes, and expenses of the administration (including statutory allowances to children or spouse); and
2) an action is brought against the surviving party within 2 years after the decedent death

Question 5

probate jurisdiction

Answer 5

“Probate” refers to the proceeding in which a testamentary instrument is judicially established as the duly executed last will of
the decedent or,

if there is no will, the proceeding in which the decedent’s heirs are judicially determined.

basically - determine if have a valid will, or if no will, who the heirs are

Question 6

where do you have jurisdiction to probate a decedents’ estate?

Answer 6

circuit courts have jurisdiction over all probate matters

venue lies in the county or city where the decent RESIDED (domicile at death) OR
- if none, the county or city where the decedent owned REAL property
- or if non - the county or city where the decedent owner PERSONAl property

Question 7

missing persons - when death is presumed

Answer 7

A person is presumed dead if they have been absent from Virginia and have not been heard from for at least seven years.

The fact that a person was exposed to a specific peril of death may be a sufficient basis for presuming that the person died, if less than seven years have passed

a person on board a ship or aircraft who disappears at sea is presumed dead after 6 months OR a determination by a board of inquiry, whichever occurs first

Question 8

who carries out the administration process?

Question 9

no time limit

Answer 9

There is no time limitation for offering a will for probate.

However, if the will is not offered for probate within ONE YEAR after the testator’s death, a bona fide purchaser of real property from an heir or a devisee under a prior will is protected.

A bona fide purchaser of real property from the personal representative or devisee is also protected if a will contest is filed more than one year after the decedent’s death, even if it is ultimately successful.

Question 10

no time limit

Answer 10

There is no time limitation for offering a will for probate.

However, if the will is not offered for probate within ONE YEAR after the testator’s death, a bona fide purchaser of real property from an heir or a devisee under a prior will is protected.

A bona fide purchaser of real property from the personal representative or devisee is also protected if a will contest is filed more than one year after the decedent’s death, even if it is ultimately successful.

Question 11

who carries out the administration process?

Question 12

who carries out the administration process?

Answer 12

the personal representative!! person responsible for carrying out estate administration

Question 13

executor vs. administrator??

Answer 13

a personnel representative named in a WILL is an EXECUTOR

a personal representative appointed by the COURT is an ADMINISTRATOR

Question 14

persons entitled to appiontemetn as administartor

Answer 14

After an intestate decedent’s death, the following have priority for appointment as administrator during the first 30 days:
(1) a sole distributee or their designee, or
(2) any distributee, or their designee, who presents written waivers of the right to qualify from all other competent distributees.

typically:
- starts with spouse
- adult children
- parents
- other relatives

if person dies with a will and names someone as executor, and that person is willing to serve and is not disqualified (felon, incompetent) - court will appoint person named in will

if person does not accept - hopefully alternate named, if not then the court will appoint an administrator

Question 15

a) if no administrator appointed within 30 days after decedent’s death

Answer 15

If no administrator has been appointed within 30 days after the decedent’s death, the court or the clerk may grant administration to the first distributee who applies.

However, if more than one distributee notifies the court or clerk of an intent to qualify after the 30-day period has elapsed, all such distributees must be given an opportunity to be heard before administration is granted.

After 60 days, if no administrator has been appointed, the clerk of the court may appoint a creditor or any other person.

Question 16

curator

Answer 16

A curator (a temporary personal representative) may be appointed in the case of a will contest or when action must be taken before a permanent personal representative can be appointed.

Question 17

Nonresident Personal Representative

Answer 17

A nonresident individual may serve as a personal representative of a decedent’s estate but MUST appoint a resident agent for service of process, or agree to allow the clerk of the court to be served on their behalf.

A corporation not authorized to do business in Virginia cannot serve as a personal representative.

Question 18

duties and powers of personal representative

Answer 18

The personal representative is charged with the duty of marshalling the decedent’s assets, giving notice to creditors and paying valid claims, filing the decedent’s tax forms, winding up the decedent’s affairs, and distributing the remaining assets according to the decedent’s will or the intestacy statutes.

a) fiduciary bond
b) inventory and list of heirs
c) accounting
d) compensation and commissions
e) powers of personal reps

Question 19

a) fiduciary bond

Answer 19

the PR must post a FIDUCIARY BOND equal to the value of the personal property in the estate - uNLESS the decedents will waives the bonding requirement OR all the takers of the estate are named as personal represtnatives

if the estate does NOT exceed $25,000, a pR may give bond without surety

a bank or trust company named as PR is not required to give bond

Question 20

b) inventory and list of heirs

Answer 20

The personal representative must file an inventory of the estate within FOUR MONTHS of their appointment.

A personal representative also must furnish a list of the decedent’s heirs at the time of qualification.

Question 21

c) accountings

Answer 21

Within 16 MONTHS following the date of qualification, the personal representative must file an accounting and file annual accountings thereafter.

Question 22

d) compensation and commissions

Answer 22

A personal representative is entitled to be reimbursed for reasonable expenses and to receive reasonable compensation.

If the personal representative has the power to sell property, they are generally allowed a commission of 5% on receipts of sale of property.

Question 23

what are the powers of a personal representative??

Answer 23

Executor powers authorized by statute may be incorporated by reference in a will or granted by the court.

The personal representative can:
- appoint agents and professional advisors,
- sue and be sued on contracts and all other claims of or against the decedent, and
- compromise claims of or against the estate without court approval.

Dispositions to a minor or incapacitated beneficiary may be made directly to the beneficiary or to her relative, friend, guardian, conservator, or committee, to be expended by such person for the beneficiary’s education, maintenance, support, or benefit.

An action for wrongful death of the deceased must be brought in the name of the personal representative.

Question 24

what after the representative is deemed to be qualified (usually after posting bond)??

Answer 24

they must also
- take an oath of office
- give NOTICE to heirs and beneficiaries, creditors

Question 25

creditor’s claims

Answer 25

If the assets in the estate are not sufficient to pay all debts and claims against the estate, creditors’ claims are paid in the following order:
1) Expenses of administration;
2) Family allowance, exempt property, homestead allowance;
3) Funeral expenses up to $4,000;
4) Debts and taxes with preference under federal law;
5)Medical expenses of the last illness up to a certain dollar amount;
6) Debts and taxes due Virginia;
7) Debts incurred in a fiduciary capacity;
8) Debts for child support arrearages;
9) Debts and taxes due localities and municipal corporations of Vir- ginia; and
10) All other claims.

All creditors in one class must be paid before any payment can be made to creditors in succeeding classes.

If assets are insufficient to pay all creditors in a class, those creditors are paid pro rata.

Question 26

what is ABATEMENT?

Answer 26

abatement is the process by which we REDUCE gifts!!

if assets owned at death are not sufficient to pay all of a testator’s debts and also satisfy all of the gifts made in the testator’s will, absent a contrary will provision, the source of payment of claims is as follows:

(reduce by order)
- 1) intestate property // Personal property passing by intestacy; (property that passes outside the will)

• 2) residuary property // Personal property in the residuary estate; (gift passing through residuary clause in will - “everything that else is left and not specifically disposed of under this instrument shall pass to A and B”)
• 3) General legacies, which abate pro rata; (general gift of some type of value that is not payable from a specific source of money) (usually money - but not specific where it is payable from)
• 4) Specific and demonstrative bequests of personal property; and (demonstrative –> specific gift of money - but the specific source of payment is designated) (specific gift - - gift of a specific item of property and only that item of property)
• 5) Real property If the personal property is exhausted, the real property abates in the same order.

Question 27

how are these reduced in abatement?

Answer 27

each category is reduced PRO RATA - and when the category is depleted/ wiped out then we move to the next category of property

Question 28

what are EXONERATION OF LIENS?

Answer 28

WHAT IF A DEBT IS OWED ON A SPECIFIC GIFT?

Liens on specifically bequeathed property are not paid off by the estate, unless directed in the will.

However, if the lien was placed on the property AFTER the testator was incapacitated (in other words, by a guardian, conservator, or agent acting under a durable power of attorney), the beneficiary is entitled to exoneration.

Question 29

APPORTIONMENT OF ESTATE TAXES

Answer 29

Unless the will contains a contrary provision, each person interested in the estate (any recipient of probate or nonprobate assets) is charged with a pro rata portion of the estate taxes.

However, any deduction (for example, marital or charitable deduction), exemption, or credit allowed in connection with the estate tax inures to the beneficiary of the gift involved.

Question 30

Small Estates

Answer 30

Under Virginia law, a small estate is valued at $50,000 or less and includes only personal property (and probate assets)

A small estate cannot include real property or nonprobate property (in other words, property passing automatically subject to the terms of a governing instrument, such as life insurance policies, joint tenancies, and accounts with payable on death provisions).

*nonprobate assets are not included in calculated whether an estate is a small estate

Question 31

what procedure is used for small estates?

Answer 31

an informal affidavit procedure is used instead
of formal estate administration.

If 60 days have elapsed since the decedent’s death and no one has applied to be or has been appointed the personal representative, personal property (not more than $50,000) must be delivered to the decedent’s successor upon being presented with the affidavit.

Assets valued at $25,000 or less may be paid to a successor without an affidavit.

Similarly, if no administration is pending, a legatee or distributee can obtain a certificate of title for the decedent’s motor vehicle upon presenting a statement of certain facts to the appropriate agency.

Question 32

payments to minor / incapacitated - made to who???

Answer 32

Payments to a minor or incapacitated successor may be made directly to them or to their agent (such as a conservator, guardian, custodian, custodial trustee, or adult relative) to be expended on their behalf, or may be held in a separate fund subject to the successor’s right of withdrawal.