By Attorney Jennifer Kahl, August 19, 2019
When a person dies, the first step in the administration of the estate is the calculation of the probate estate. Depending on the size of the probate estate, you may be able to avoid opening a formal probate estate. Virginia law has some options that can help you administer smaller estates without the expense, time, and liability of formal probate proceedings.
The Small Estate Affidavit: Virginia Code § 64.2-601
First, calculate the probate estate. If the total is less than $50,000, you may consider using a Small Estate Affidavit. Virginia Code § 64.2-601 outlines the requirements for the Affidavit. Among other things, the Affidavit must state that the value of the estate is less than $50,000; that no person has or plans to qualify as personal representative on the estate; and that at least 60 days have passed since the decedent’s death. The Affidavit must list the names and addresses of all the heirs/beneficiaries of the estate, and they all must sign it. The heirs/beneficiaries may select one or more of themselves to receive the assets of the estate on behalf of all the others. The person(s) who receives the assets has a legal obligation to share it with the others.
For example, suppose that Dad died and the only asset in his estate was a $30,000 bank account. Dad has a will that leaves everything to his three kids, equally. The bank will probably tell you that, to get the funds, you need to go to Court and open a formal probate estate. However, this is not your only option (and why you should not take legal advice from a bank teller). A much easier option is to create a Small Estate Affidavit. You and all your sibling will sign it, and they can designate you as the person to receive the bank funds. When you take this Affidavit to the bank, the bank should give you all the money in Dad’s account. The check should be made out to you personally, not to Dad’s estate. You can then share the money with your siblings. This is much easier than opening a formal estate.
Delivery of a Small Asset: Virginia Code § 64.2-602
Virginia Code § 64.2-602 offers another option for accessing smaller accounts. While 64.2-601 (the Small Estate Affidavit) considers the total value of the probate estate, 64.2-602 looks at the value of each asset comprising the probate estate. If an individual asset is worth less than $25,000, an heir can access it without a Small Estate Affidavit and without formal probate proceedings.
Virginia Code § 64.2-602 says that any individual heir, without the cooperation of the other heirs, may access any estate asset as long as (a) the asset is less than $25,000, (b) at least 60 days have passed since the decedent’s death, and (c) no application for personal representative has been granted or is pending in any Court. The person who receives the asset is legally obligated to share it with the other heirs.
For example, suppose that Dad died with four bank accounts in his probate estate, each valued at $20,000. Since the total value of his estate is $80,000, the Small Estate Affidavit will not work. However, using 64.2-602, you should be able to access all the money without formal probate proceedings. Technically, the law means that you can just walk into the bank, state the situation, and they should give you the money. In my experience, banks are not willing to do this. Most financial institutions are not familiar with 64.2-602, or with the small estate affidavit, or the nuances that distinguish the two. Because of this, I usually prepare an Affidavit when I plan to use 64.2-602, even though the Code specifically states that you don’t need an affidavit. I find that having an “official-looking” document makes the bank more likely to comply.
Sometimes, a financial institution will refuse to honor 64.2-601 or 64.2-602, no matter how “official” your affidavits look. These financial institutions are ignorant of the law and convinced that they need to see a Court document. You could sue them, because they are not following the law. However, it is usually easier to “play along.” Most Court Clerks will agree to issue you something called a “limited” qualification certificate. These certificates are basically the same thing as the affidavits outlined in 64.2-601 and 64.2-602, but they are stamped by the Court and say “qualification certificate” at the top. This is usually enough to appease those difficult financial institutions.
However, be very careful when requesting a limited qualification certificate from the Clerk. In my experience, not all Clerks are familiar with these documents. You certainly don’t want the Clerk to issue a “normal” certificate, because that will open a formal probate estate. Proceed with caution.
Most financial institutions are familiar with one method of settling estate assets: formal probate estate administration. So, if you go to the bank and ask, “How do I get Dad’s money?”, they will almost always tell you to go to Court and open a formal probate estate. Often, this is very bad advice. You should always seek counsel from an experienced estate administration attorney. She will consider all your options and help you select the best one.