Probate can be lengthy and costly and can eat away at the value of your estate. Many people want to ensure their assets go to their loved ones without the hassle of probate. That is why understanding which assets bypass probate in Virginia can make estate planning more efficient and less stressful.
Which assets avoid probate?
Here are some common asset types that generally avoid probate in Virginia:
- Assets with a designated beneficiary: Policies for life insurance, retirement accounts (like 401(k)s and IRAs) and payable-on-death (POD) bank accounts all allow you to name a specific beneficiary. These assets transfer directly to your chosen individual or entity upon death, bypassing probate.
- Jointly owned assets: If you own assets jointly shared with someone else carrying the right of survivorship, these assets automatically go to the surviving owner(s) when the other dies. This process skips probate. This rule often applies to real estate and bank accounts.
- Assets in a living trust: You set up a living trust upon transferring assets while still alive. You name beneficiaries who will receive these assets after your death. The trust document outlines how this transfer happens.
It is expensive to get into probate. Fortunately, certain assets can bypass it entirely, so your beneficiaries can receive their legacy more quickly and with potentially fewer expenses.
Why do I need to bypass probate?
Probate in Virginia involves court supervision and can take months or even years to complete, depending on the complexity of the estate. Your beneficiaries may experience delays in accessing inherited funds or property during this time. Probate also often involves court fees and legal expenses, potentially reducing the value of the estate passed down to heirs. To ensure your estate plan is effective, it may be helpful to consult with a professional who can help you make informed decisions about how to avoid probate and structure your estate plan.