When someone passes away, it’s common for their real estate to go through the probate process before formally and fully transferring to the person who inherits it. In this post, we will break down how probate works with real estate, the associated costs of probate, and some ways to avoid it.
Whether you’ve inherited a house or are planning the future of your own estate, understanding how probate works with real estate in Virginia can be a game changer.
There are two ways ownership of a person’s real property transfers in the land records to someone else when they die: through probate or outside of probate.
What is probate and how does it affect real estate in Virginia?
Probate is a legal process for distributing a deceased person’s assets to their heirs. In Virginia, real estate passes to the heirs immediately at the time of death. The probate process formally confirms their right to inherit and transfers the title of the property to them, often as specified in a will.
Real estate passed on either testate or intestate will typically be subject to probate. Land records change in title when a will is admitted to probate court or (if there is no will) when a judge’s affidavit is recorded.
In some cases, inherited real estate is not subject to probate, such as:
Real estate passed on by survivorship (a surviving spouse or co-owner)
Real estate passed on by a Virginia Transfer on Death Deed (TOD)
Property held in a trust
How does probate work in Virginia?
The probate process is designed to ensure all heirs and creditors have notice of the assessing and settling of the deceased’s estate.
Here’s a look at how probate works in Virginia:
The deceased’s will and death certificate are filed with the Circuit Court
An executor or administrator is confirmed or appointed to the estate
The heirs – whether appointed by will or statutory heirs – are notified
The executor submits an inventory of the estate’s assets (unless the estate is small enough to qualify for no reporting)
Any outstanding taxes or debts are paid out of the estate
Remaining assets are distributed to the heirs
Real estate in probate is immediately transferred to the heirs upon the decedent's death – and their responsibility for any debt that comes with it. If the decedent's debts can’t be covered by the remainder of the estate, the real estate might have to be sold to settle them.
Some questions to consider when real estate goes through probate:
Is there a mortgage on the property?
Is there a reverse mortgage on the property?
If it’s being used as a rental property, will the heirs need help managing the rental?
How long does probate take in Virginia?
Probate in Virginia generally takes a minimum of six months, but it can take several years based on the size and nature of the estate. Disputes among beneficiaries or the lack of a valid will can also lengthen the process.
Once the probate process is started, the administrator of the estate has four months to submit an inventory of the deceased's assets to the court.
Virginia probate laws are designed to allow enough time – usually six months in Virginia – for the deceased’s creditors to file claims against the deceased’s estate for any outstanding debts. Validating and settling those debts can be a time-consuming process for the executor.
Virginia Probate Timeline
Below is a standard estimate of how long each step in the probate process takes in Virginia. Many factors can influence the actual timeline in any given case, but this offers a general idea of what you can expect.
Probate petition is filed with Circuit Court (within 30 days of death)
Heirs and creditors are notified (2-10 weeks)
Asset inventory completed (within 4 months)
Debts are filed by and settled with creditors (6-12 months)
Remaining assets are distributed (2-10 weeks)
Final accounting is accepted by the court; the estate is closed (2-10 weeks)
Again, the actual timeline for your probate process can vary widely. Estates with fewer assets, no debt, and a clear will may be able to complete the probate process in a much shorter time frame.
What is an executor or administrator in the probate process?
An executor or administrator is the personal representative who is responsible for managing the probate process. This person is often appointed by the decedent’s will, and if not, the court will allow another willing party to serve as executor.
Any mentally and physically capable legal adult can serve as executor. They have very specific legal requirements to follow to be named administrator.
When the executor is appointed and the requirements met, the executor receives a certificate of qualification to commence acting for the Virginia estate.
Can the executor sell the estate's real estate during probate?
The most common reasons for an executor to sell real estate during probate are to cover the estate's debts or distribute assets.
If a Last Will and Testament authorizes the executor to sell real property included in the estate, then the executor will be able to sell the property and collect the proceeds in the estate’s asset account.
If the will does not expressly permit the executor or administrator to sell the real estate, they must petition the court to sell the property to cover the descendant’s debts or otherwise.
Can the heirs sell inherited real estate during probate?
When an owner of real estate dies in Virginia, their property “drops like a rock” directly to the heirs. Rightful heirs often will have the right to sell the property and receive the proceeds from it while the rest of the estate is going through probate.
If there are any liens or debts attached to the house at the time of sale, they will have to be paid off from the proceeds before the heir receives the rest.
If you are trying to sell an inherited property during the probate process, the title company handling the transaction will have to confirm the chain of title to confirm you are the rightful owner.
Note: If either heirs or the executor sell the property within a year of the owner’s death, they may be required to purchase a hazardous risk premium at closing as insurance to cover any claims against the estate.
How much does probate cost in Virginia?
One reason many people try to avoid probate with real estate is because it can be a costly process. Many things can affect how much probate costs in Virginia. A few of these factors are:
Size of the estate
Complexity of the estate and assets
Fees charged by executor and attorney
Disputes raised during probate (legal fees)
In addition to the Virginia and local probate taxes (see more on that below), there are some report fees that come along with the Virginia probate process. These include:
Inventory report fee ($275 max)
Recording fees (usually around $100-$150)
Qualification fee ($20-$100)
How much is Virginia’s probate tax?
Estates are subject to a probate tax during this process as well, which is due at the time of filing when all the deceased’s final tax returns are due as well.
In Virginia, the state probate tax is generally $1.00 for every $1,000 of the estate's value. There is also a local probate tax, which can vary by location. In Virginia Beach (and many other local districts in Virginia), this is $0.33 per $1,000 of the estate's value.
Estates valuing over $13.61 million per individual in 2024 ($27.22 million for married couples) may also be subject to an additional federal tax.
When creating an inventory of assets for the estate in Virginia, the value of real property is determined by a recent appraisal or based on the local tax-assessed value. It's important to note that the estate cannot reduce the value of real property by the amount of any outstanding mortgage or lien.
Who pays Virginia probate fees and taxes?
When real estate and other assets go through probate in Virginia, the fees and taxes are typically paid by the heirs. They can be paid out of the proceeds from the estate or out-of-pocket by the heirs, but can be reimbursed at the sale of property or other disposition of estate assets.
How can I avoid probate for my real estate in Virginia?
When an estate includes real estate, probate taxes can be especially high. Probate can also be time-consuming and create challenges for the heirs to your property.
There are some legal ways that can prevent real estate from having to go through the full probate process in Virginia. They include:
Place real estate in a living trust
Assets in a trust you control go directly to your heirs when you die rather than going through probate. Assets will have to be transferred into the trust while you’re still alive or by a transfer-on-death deed, and you’ll be the trustee.
Use a transfer-on-death deed
A transfer-on-death deed (TOD) is like adding a beneficiary to an account. They will be able to automatically inherit your property when you pass without going through probate. You’ll retain ownership while you’re alive, and you can change or remove the beneficiary at any time.
Use a life estate deed
A life estate deed allows you to retain the right to live on a property during your lifetime, while effectively transferring the property to a beneficiary. You and the “remainderman” will both have an interest in the property that you can transfer or share – yours during your lifetime, and theirs after your death. However, this one is quite a process to undo, so you can’t simply change your mind about the deed once it’s signed without having another deed prepared and signed by the beneficiaries.
Use joint tenancy
If you have joint tenancy with right of survivorship (JTWROS) on your property, the other owner(s) will retain the title upon your death. Each owner in a JTWROS agreement has 100% ownership of the real estate.
Gift the property
Transferring the property to another owner while you’re still alive means that you give up your rights to the property (unless you’ve reserved a life estate or worked out a legal agreement). It avoids probate when you pass because the real estate is no longer part of your estate. However, there could be higher capital gains taxes on the eventual sale of the property when you go this route.
Avoiding probate with real estate can save time for the beneficiaries, though these methods each have their own costs and benefits. You should always work with an estate lawyer or other legal expert when embarking on these strategies to avoid probate.
If you’re interested, we’ve broken down these methods of avoiding probate in Virginia further in this post.
What happens to real estate if there is no will?
When someone dies without a will, they have died “intestate.” Virginia probate Intestacy laws dictate how the deceased’s assets will be divided – including their real estate.
Generally, property left without a will passes to the decedent’s closest living relatives, such as their spouse and children. However, the specific distribution can vary depending on the family's situation.
In Virginia, the distribution of real estate through probate when someone dies intestate is generally determined in the following sequence (going to the next one if the previous doesn’t apply):
Surviving spouse
Unless the deceased has children or descendants from someone other than their surviving spouse, then the estate will be split up between the spouse and descendants
Children and their descendants
Parents or parent
Siblings and their descendants
Split between these relatives of the deceased’s parents:
Their parents
Their siblings (and descendants)
Their grandparents
Their aunts and uncles (and descendants)
And if there’s truly no relative to be found to inherit the real estate, the property becomes property of the state (the Commonwealth of Virginia).
It can get complicated fast, which is why we highly recommend making sure you have a will and estate plan in place as soon as you own a property – if not before.
When should I start filing probate in Virginia?
While there is no specific time frame in which you need to start the probate process after someone’s death in Virginia, it’s recommended you get the process started within 30 days.
Where will probate take place in Virginia?
Probate will be overseen by the Circuit Court in the county or city where the deceased resided at the time of their death. It will usually be handled by the Clerk or Deputy Clerk.
How do I start the probate process in Virginia?
The first step to getting the probate process moving and transferring inherited real estate properly to the heir is to determine if the decedent had a will. If there isn’t and you wish to qualify as an administrator of the estate, you’ll want to collect information and knowledge of the assets and value of the estate.
Next, you’ll deliver the death certificate and will (or information about the estate’s value) to the Circuit Court of the residence of the deceased. It will be filed there, the executor appointed, and probate taxes will be paid at this time.
What happens to outstanding property taxes during probate?
Debts and taxes owed don't simply disappear when someone dies. It’s essential to make sure any property taxes or mortgage payments are paid on time even during probate, or a lien against the home or even foreclosure could result.
The executor is responsible for making sure property taxes are paid during probate, usually out of the estate itself, along with completing the deceased’s final tax returns.
If you inherit a home that goes through probate, the executor will still be responsible for paying those property taxes until the legal title for the property is transferred to you. At that point you’d have to pay any past-due, current, and future property tax bills unless the will dictates otherwise. The time it takes for the official title of the house to be transferred is often dependent on where you live.
If someone passes away intestate without surviving heirs, the state owns the property and can sell the home to pay any remaining taxes due.
Can you live in a house under probate?
Yes, you can live in a house that is going through the probate process. It is a good idea for someone to live there to keep the property secure and help prepare it for sale or inheritance.
You should note, however, that if the decedent left a lot of debt, you may not be allowed to remove furnishings or other items included in the estate from the home. They might need to be sold to pay creditors.
How do you handle mortgages or liens on real estate during probate?
The probate process can feel extra burdensome when there is an involuntary lien, mortgage, or a reverse mortgage on the real estate under probate. When someone inherits a house, they also incur the debt that the property has.
The monthly loan payments will still need to be made, so heirs should contact the lender to get instructions on how to proceed with those payments as soon as possible.
While the property is under probate, the executor can use the money from the estate to continue making mortgage payments until the home is transferred to the heir or sold.
The house can be sold – or may need to be sold – to pay off a lien. If the other assets can’t cover the lien, proceeds from the house sale may.
The Bottom Line
When someone passes away with or without a will in Virginia, their real estate will likely go through probate unless prior arrangements were made (like a trust or a TOD deed). The process typically takes at least six months and comes with costs and fees.
While heirs immediately inherit real estate when the previous owner dies, there is still a possibility the property may need to be sold if the estate has debts. Every situation is different, so be sure to work with a trusted Virginia Beach estate attorney when you inherit property or are creating an estate plan to pass real estate on outside of probate in Virginia.
Did you recently inherit a property? Contact CGP Real Estate for a consultation to figure out which strategy you can use to maximize your asset and build wealth.
Comments