Non-Probate Assets in Virginia
Probate is the legal process that includes proving the validity of a decedent’s will, identifying the decedent’s assets and transferring those assets to the decedent’s heirs, beneficiaries and/or creditors. “Probate assets” are assets that pass to your heirs or beneficiaries pursuant to your will. “Non-probate assets” are assets that pass to your heirs or beneficiaries by some means outside of your will, thereby avoiding the probate process that involves qualification of a fiduciary, costs, and delay, as well as other aspects of probating a will.
Some examples of non-probate assets in Virginia are:
Assets with a Named Beneficiary. Life insurance contracts payable to a designated beneficiary, and retirement benefits payable to a designated beneficiary, such as 401(k)s and IRAs, pass directly to the named beneficiary at the death of the policy or account owner, rather than by a will.
Payable on Death (POD) Accounts. A payable on death account is a bank account that belongs to you, as the original payee, is payable to you during your lifetime, and at your death is payable to one or more POD payees. At any time prior to your death, you can change the form of the account to something other than a payable on death account, or you can change the name of the POD payee. If you are the sole original payee, the account balance belongs to the POD payee at your death. If you and your spouse jointly own a POD account, you each have equal ownership of the account balance and at the death of one of you, the surviving spouse owns the account balance. POD payees are, however, liable to satisfy claims and charges against your estate at your death, and your creditors can attach your POD to satisfy your debts.
Jointly Held Assets with Right of Survivorship. When assets, real or personal property, are owned by joint tenants with right of survivorship, each joint tenant owns an undivided equal interest in the asset. The joint tenancy is terminated if one joint tenant transfers his or her undivided interest in the asset to a third party. During their lifetime, each joint tenant has the right to force the sale or partition of the asset without the consent of the other joint tenant. At the death of one of the joint tenants, his or her interest passes to the surviving tenant. Tenancy by the entirety is a special form of joint tenancy with right of survivorship that exists only between spouses.
In addition to the non-probate assets you may have, you should consider having a will drafted to govern how your probate assets will be distributed upon your death. The experienced estate planning lawyers at Livesay & Myers, P.C. can draft a simple will for you that designates who receives your real and personal property upon your death. Contact us to schedule a consultation today.