Many people believe a last will and testament controls the distribution of all their property. In Virginia, however, the will only governs assets that are part of the probate estate. The asset’s title or beneficiary designation often determines its path, regardless of what the will directs.
What defines the probate estate?
Probate is the court-supervised process for validating a will and distributing a person’s property after death. The assets governed by this process form the “probate estate.” In Virginia, the probate estate generally includes only property the deceased person owned in their sole name. If an asset has no co-owner and no designated beneficiary to receive it automatically, it becomes part of the probate estate. This distinction determines which assets you will actually control.
Assets that commonly bypass the probate process
The assets that fall outside the probate estate pass directly to a new owner by contract or law. This transfer happens automatically based on the asset’s ownership or setup.
In Virginia, frequently encountered non-probate assets consist of:
- Property owned as “joint tenants with right of survivorship”
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Bank or brokerage balances carrying a “payable-on-death” (POD) instruction
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Real property governed by a “transfer-on-death” (TOD) deed
- Life insurance contracts identify a chosen beneficiary
- Retirement savings vehicles, including IRAs and 401(k) plans, with a designated beneficiary.
These beneficiary designations and titling methods serve as direct instructions on where the asset should go.
How titling and beneficiaries work together
The legal structure of these non-probate assets effectively creates a contract that overrides the will. For instance, if you name your sibling as the beneficiary of your life insurance policy, they will receive the proceeds directly from the insurance company. This happens even if your will states that your spouse should receive all your property. Similarly, a house owned jointly with a right of survivorship automatically belongs to the surviving owner. The will has no power over these specific assets.
The importance of reviewing your asset details
This separation between probate and non-probate assets is an important consideration in estate planning. Simply writing a will does not ensure your plan meets your goals. You must also review the title and beneficiary for each of your significant assets.
Keeping these designations current after major life events, such as marriage, divorce or the birth of a child, is necessary. Properly aligning your asset titles and beneficiaries with your overall estate plan provides clarity and can simplify the settlement process for your loved ones.