Virginia Probate – Inheriting Real Estate

By Attorney Jennifer Kahl, August 12, 2019

What happens to real estate in Virginia when someone dies? It depends on how the real estate was titled and whether the person had a will.

The titling of real estate

If a person owns real estate as tenants by the entirety or as joint tenants with rights of survivorship, the real estate will automatically be owned by the surviving owner. There is no need to create a new deed. The transfer is not affected by probate and is not taxed.

If the real estate has been titled in the name of a trust, then the terms of the trust will control the distribution of that land. The trustee will usually execute a deed of distribution to transfer the real estate from the trust to the new beneficiary. The transfer is not affected by probate and is not taxed.

Transfer of death or life estate deed

If the person who died executed and recorded a “transfer on death deed” (TOD deed) or a life estate deed for the property, then the real estate is automatically owned by the named beneficiary. There is no need to create a new deed. The transfer is not affected by probate and is not taxed.

When the decedent has a will

If the real estate does not have a living joint owner and there is no TOD deed, then the terms of the Will control the distribution of the real estate. Sometimes the Will specifically mentions the real estate and names a beneficiary. However, more often than not, the Will says something general like “I give my entire estate, in equal shares, to my children.” In this situation, the real estate is included in the gift of “my entire estate.”

The beneficiary (or some other person) should record the Will to the Circuit Court in the jurisdiction (city or county) where the decedent lived prior to death. If the real estate is located in that same jurisdiction, then no further action is necessary. If the real estate is located in a different jurisdiction, then the beneficiary should ask the Clerk for an “exemplified” copy of the Will. Record this exemplified copy of the Will to the jurisdiction where the real estate is located.

When the beneficiary records the Will in the proper jurisdiction, the Clerk will update the property records to show that the beneficiary is the new owner. There is no need to create a new deed. The recorded Will is essentially the “deed” that proves that the beneficiary owns the property. At the time of recordation, the clerk will charge a one-time city or county tax. This is usually 1-2% of the value of the real estate.

This transfer occurs “outside of probate.” In other words, even though the Will controlled the distribution of the real estate, the real estate is not part of the probate estate. The Personal Representative (i.e. executor) has no control over the property.

When the decedent does not have a will

If the real estate does not have a living joint owner, does not have a TOD deed, and the decedent has no Will, then the distribution of the property is controlled by Virginia’s laws of intestacy. Generally, this means the property will pass to the decedent’s spouse, children, parents, or siblings.

To effectuate the transfer, simply fill out the Court’s one-page Real Estate Affidavit. It is available online here, and also available at the Circuit Court. Record this form at the Circuit Court in the jurisdiction where the property is located.

Just about everything else pertaining to the transfer of the real estate is the same as if there was a Will. There is no need to create a new deed; the Real Estate Affidavit acts like a “deed,” proving ownership. The property will be taxed in the same way it would be if there was a Will, and the real estate still passes outside of probate.

Can real estate ever be included in the probate estate?

As stated above, real estate generally passes “outside of probate.” However, there are some situations where the property may be included in the estate. First, the Will may specifically direct the Personal Representative to sell the real estate as part of the probate estate and distribute the proceeds to the beneficiaries. Second, the Will may give the Personal Representative the ability, but not the requirement, to sell the real estate. In this situation, the Personal Representative can choose to allow the real estate to pass outside the estate, or she can choose to sell it as part of the probate estate. Finally, if the non-real estate assets are insufficient to pay the debts of the decedent, the Personal Representative may be obligated to bring the real estate into the probate estate so that it can be sold to pay the debts.

Conclusion

If you are creating an estate plan for your own assets, you should carefully consider how your real estate should pass to your beneficiaries. As you can see, there are several options; most of them are very good. If you are the beneficiary of real estate, or if you are a Personal Representative, you should consider all your options before determining a course of action. Our experienced attorneys can help you make these important decisions.