The call comes late one evening, or early the next morn. Whether a client or an inquiry from a stranger seeking guidance, when I hear the question, “My loved one has passed, now what?” I so wish I could take away the pain – ease the grief.
The interruption - there is nothing in life that prepares one for the passing of a family member or a friend. Not only is one grieving the loss of a loved one, often the same individual finds him or herself named as the Executor (or Executrix) in the decedent’s will.
Out of respect for the decedent, the Executor will want to ensure that her intent for her estate is honored. The following is a roadmap for the Executor, outlining the possible steps to take if you have been named in a will as an Executor.
Please keep in mind, that each will is different, and there may be variations to address or situations that arise that need specific legal advice from an estate planning attorney, an answer from the Commissioner of Accounts, or an opinion from the Circuit Court. The following instructions are applicable to the Commonwealth of Virginia (the Commonwealth) and are not comprehensive or case specific. Nor are they intended as legal advice.
Step One: Qualification of Executor/Executrix
When your loved one passes away and you have been named as Executor, you may choose to submit the will for probate and qualify as the Executor. Prior to submitting the will, you are encouraged to seek legal advice. In the event that the estate is insolvent, meaning the debts outweigh the assets, consulting with an estate planning attorney is critical.
To probate an estate in the Commonwealth, you must submit the Last Will and Testament to the Circuit Court of the county in which the decedent resided at the time of death, and qualify as the Executor. The Clerk of the Circuit Court will want the following documentation prior to setting the time for the appointment: (1) Last Will and Testament, (2) Death Certificate, (3) Probate Information Form, (4) List of Heirs, and the (5) Probate Tax Return.
Unless an asset falls within the definition of a Small Estate (valued under $50,000) and can be handled under a Small Estate Affidavit, it is necessary to probate an estate when the decedent has solely held assets; that is, assets which do not have a joint or co-owner with rights of survivorship, a beneficiary (on the security or account, not in the will) or a transfer on death designee. Assets include real property and personal property (both tangible and intangible).
Step Two: Attending the Appointment for Qualification
If the decedent died with a will, having provided the information required under Step One, in addition to providing the money for the bond or the bond with surety, bring the following with you to your appointment with the Clerk of the Circuit Court: (1) the original will and self-proving affidavit, (2) certified copy of the death certificate, (3) a Virginia resident who can qualify as the registered agent if the Executor resides outside of Virginia, (4) photo identification, and (5) cash or check to pay fees (for example, state and possibly local probate taxes).
Step Three – Taking on the Role of Executor
Control: Once you have received the Certificate of Qualification, it is your duty/authority to take control/possession of the estate assets. Determine what real property and personal property is owned by the estate of the deceased.
No Commingling of accounts: Obtain an EIN for the Estate. Establish a checking account in the name of the Estate of the deceased.
Investment and Diversification: The Executor has the responsibility to invest and preserve the value of the principal funds of the estate. Be aware of the governing Code of Virginia requirements (§ 64.2-1501), as well as if the “prudent investor rule” (§ 64.2-781) has been waived within the will.
Record Keeping: Keep precise and accurate record keeping of all assets and any and all distributions, as well as additional items the Commissioner of Accounts may require. Do not commingle any of the estate assets with your personal assets.
Notice to Heirs: Within thirty days after your date of qualification, you are required to provide notice to all the heirs at law and all the beneficiaries under the will, using the form titled, “Notice Regarding Estate,” Form CC-1616. Within the same timeframe, you are required to submit the “Affidavit of Notice Regarding Estate.” This form is submitted to the Clerk of the Circuit Court.
Taxes: The Executor is charged with the responsibility of filing any income, inheritance, or estate tax returns required by state or federal law. Tax questions should be addressed by a certified public accountant who has an understanding of final estate filings.
Step Four – Inventory
Within four months after your date of qualification you must submit the completed “Inventory for Decedent’s Estate” form (Form CC-1670) to the Commissioner of Accounts (§ 64.2-508 of the Code of Virginia). The assets reported on the Inventory are those assets that comprise the estate of the decedent and their fair market or tax assessed value at the date of the decedent’s death.
Step Five – First Accounting
Within sixteen months after the date of qualification you must submit the completed “Account for Decedent’s Estate” form (Form CC-1680) to the Commissioner of Accounts, showing the estate transactions for the initial twelve-month period. Annual Accountings are filed until the Estate is distributed.
Step Six - Debts and Demands Hearing
In the event that the Executor does not have a comprehensive understanding of the decedent’s financial encumbrances, it is good practice to submit a request for a Debts and Demands Hearing to the Commissioner of Accounts.
Step Seven – Show Cause Against Distribution and Order for Distribution
File a motion with the Circuit Court for a Show Cause Against Distribution Hearing, allowing legatees or distributees a forum for contesting the distribution of the Estate. The anticipated Order of Distribution that follows such Hearing, is the blessing from the Court to proceed with said distribution. Such Order affords the Executor a protection against demands of creditors and all other persons as stated in § 64.2-556 of the Code of Virginia.
Seeking advice from legal counsel, a certified public accountant, and a financial advisor regarding estate administration prior to taking any action should reduce the fear or trepidation regarding the probate process.
As stated earlier, the above steps are not case specific. Though each estate matter is unique, the Code of Virginia truly affords protections for both the intent of the decedent and the good faith efforts of the fiduciary.