Frequently Asked Questions about
Estate Planning, Wills, Trusts, and Probate

• May I avoid Virginia probate on some or all of my estate?

Indeed you may. Creating a revocable living trust, discussed further below, is the best way to avoid or simplify probate.

One may also avoid or simplify Virginia probate in other ways, and some people should consider these alternatives in addition to, or instead of, a revocable living trust.

The most common non-trust way to bypass probate is to simply shift the ownership of property so that it bypasses probate administration. For example, real estate, bank accounts, and securities owned in joint tenancy with right of survivorship or as tenants by the entireties usually are not subject to probate proceedings. “Tenancy by the entireties” under Virginia law may be used only by married couples and resembles joint tenancy with the right of survivorship, with an important difference – the creditors of only one spouse may not assert claims against property held as tenants by the entireties. For this reason, many married couples in Virginia own their property as tenants by the entireties. Since July 1, 2000, Virginia law has permitted married couples to transfer ownership of their principal residences to their revocable living trusts in equal shares, without losing the protection against creditors that entireties ownership provided.

Automobile titles and most bank and financial accounts can include a “pay on death” or “transfer on death” designation. Stocks and bonds may also be held in “transfer on death” form. Such property passes automatically to the named person upon the death of the owner, without any court supervision.

(Note that any property acquired by a husband and wife during their marriage and while living in one of the eight community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington) may still be considered to be community property after they move to Virginia. If you have lived in one of those states and still own property there, be sure to discuss its status with competent advisors.)

Titling assets jointly or as tenants by the entireties is relatively simple, but in most cases, it is a bad idea nevertheless if undertaken without good estate planning advice. The use of jointly titled assets to avoid probate often creates estate, gift, and capital gains tax problems, especially if title is jointly held with children or grandchildren – something that we almost never recommend. It may also expose those assets to debts of, or lawsuits against, a joint tenant. Joint tenants have been known to embezzle or “borrow” from joint accounts. Sometimes, joint tenants secretly sever the joint tenancy without the knowledge of the other tenant, who is then surprised when he does not inherit the property upon the first tenant's death.

Be sure to obtain legal and tax advice about whether you should hold any of your property jointly or by the entireties, and how best to coordinate such forms of ownership with the provisions of your will or trust. Joint ownership with survivorship often has benefits, but is not a low-cost substitute for a will or trust. A will or trust is still necessary to determine who receives the property upon the survivor’s death, and when and how the property will pass to the ultimate beneficiaries.

“A citizen can hardly distinguish between a tax and a fine, except that a fine is generally much lighter” –G.K. Chesterton