The manner in which an asset or an estate will be distributed is dependent on the nature of the asset or estate. For example, in some cases, bank accounts may be re-titled. In other cases, the beneficiary or heir may receive a distribution. The distribution of any asset, however, is entirely dependent on the nature of that asset. An attorney can help with the variety of nuances and complexities in estate distribution.
Planning for end-of-life issues can give you the control you need in a difficult situation and the opportunity to provide a legacy for those you love. A Virginia estate planning lawyer can also provide you with help creating a comprehensive plan for your future. Whether your estate is large or small, the creation of a plan for the distribution of estates to heirs or beneficiaries in Virginia is essential, so it is important to consult with an experienced estate planning lawyer as soon as possible.
Laws of Intestacy
Virginia provides laws of intestacy that determine to whom assets are distributed if the decedent does not have a last will and testament. If the decedent dies without a will, the Virginia laws of intestacy will be applicable and will determine how the assets are distributed. Generally, spouses and children have some statutory rights. Virginia has adopted a novel approach to the treatment of spouses and has allowed their share to be somewhat determinative on the length of marriage. These laws reflect the amount of assets to which a spouse is entitled.
These are hard and fast rules and, although families can, in some situations, come to an agreement about how they would like assets to be distributed, such agreements do come with some personal gifting tax implications or requirements for disclaimers of the assets.
Role of Priority
There are a couple of instances in which Virginia law provides priority. The first consideration is who has priority to serve as an executor, and the second is which claims, claimants, or debt collectors have priority to receive in circumstances in which there is an insolvent estate. In such cases, priority details who has the right to receive an inheritance from the estate and to what amount they are entitled after all distributions are made for legally enforceable debts and claims.
In this way, the order of priority may not necessarily be applicable at the time of distribution. However, it should be noted that, in the event of an insolvent estate, there is some priority given to the family and spousal allowances over other debtors or claimants.
Process of Distribution of Assets
It is important for an individual who is planning their estate to understand how assets pass at death. Assets generally pass in four ways at death: pursuant to beneficiary designations, pursuant to ownership, pursuant to a trust, or pursuant to probate. As such, there are a number of myths surrounding the probate process. Many individuals incorrectly believe that probate allows for the state or the Commonwealth to take or seize the assets of a decedent. Generally, a decedent’s last will and testament or state laws regarding probate determine the manner in which assets are distributed.
Estate administration, or the process of probating an estate, involves asset collection and marshaling, debt review and payment, tax filing and payment, and asset evaluation and distribution. Thus, often, a personal representative may not have any control over some of the decedent’s assets at death. For example, a decedent may have a life insurance policy with a large death benefit. If the policy had a designated beneficiary, said policy would pass outside of the probate process, and out of reach of the personal representative. A personal representative will not be able to change the designation of the beneficiary after the death of the decedent.
Working with an Estate Planning Attorney
Typically, the distribution of assets is conducted in accordance with the decedent’s last will and testament. If a decedent does not have a last will and testament, or if the beneficiaries named in their last will and testament have died and no contingent beneficiaries are named or identifiable, their assets will pass in accordance with the probate laws of the state or the Commonwealth. In this way, the distribution of assets to heirs or beneficiaries in Virginia is primarily determined by an individual’s last will and testament, and not the desires of the representative. An estate planning attorney will best know how to navigate the complexities determining distribution.
One of the easiest ways for an individual to protect against assets escheating or being taken by the state is to ensure that they have an up-to-date last will and testament that reflects their wishes for the distribution of assets at death. For this reason, it is best for an individual to review their estate planning documents every three to five years with their estate attorney to be sure that such documents appropriately identify the named beneficiaries.