Only in the rarest of circumstances will the state receive the property of a decedent.
Joint Tenancy. If you hold property jointly with another person “with survivorship,” it is presumed that the survivor is entitled to all the property upon the death of the first to die. Typically, a deed or investment account will indicate “joint tenants with right of survivorship.” Joint ownership by a husband and wife with survivorship rights is called a “tenancy by the entireties.” Property owned by two or more people without survivorship is called a tenancy in common. This intention should be clearly stated in the title to avoid conflict upon the death of the first tenant.
A bank account in two or more names is presumed to be the property of the survivor(s) even if “right of survivorship” is not set forth. TOD or POD. A “Pay on Death” or “Transfer on Death” designation may be added to an account; in which case the designated payee will be entitled to the account balance upon the death of the account holder.
Beneficiary Designations. Many assets routinely have named beneficiaries who will take the balance upon the death of the asset owner. Common examples are life insurance policies, annuities, and retirement plan accounts. If no beneficiary is named, the account will be paid to the estate of the decedent.
If an asset is jointly titled with survivorship or has POD, TOD or a beneficiary designation, a contrary provision in a will or trust will not control.
Trust. If the decedent created a trust during his/her lifetime and transferred assets to the trust during lifetime or at death, then the assets will pass to the beneficiaries named in the trust. (See this post on Trusts, November 17, 2015)
Will. Assets which do not pass by any of the foregoing methods are disposed of in a properly executed will. (See this column Explaining Process of Probate, January 2, 2015)
Intestacy. If none of the foregoing methods of transfer exist, then the decedent’s assets will pass according to a list of beneficiaries set forth in the Virginia Code for persons dying “intestate” (ie, without a will). The surviving spouse of the decedent is entitled to all of the assets unless the decedent is survived by descendants at least one of whom is not descended from the surviving spouse. In that case, the surviving spouse is entitled to one-third of the estate and the decedent’s descendants two-thirds. If there is no surviving spouse, the entire estate is distributed to the decedent’s descendants. If there is no surviving spouse nor descendants of the decedent, then the estate passes to the parents (or surviving parent) of the decedent. If none of the above is surviving, then the estate passes to the brothers and sisters of the decedent or their descendants. If no one in the above categories is surviving, then half to the decedent’s paternal kindred and half to the maternal kindred; if none, then to the kindred of the decedent’s most recent spouse (who predeceased the decedent), provided that the decedent was married to him/her at the time of that spouse’s death. Only if no one in any of the foregoing categories is surviving, does the estate go to the state.
Transporting the Estate. Indications are that you can’t take your estate with you.
From "Amy & Dan Smith's Planning for Life" column appearing monthly in the Blue Ridge Leader, Loudoun County, VA.
The foregoing article contains general legal information only and is not intended to convey legal advice. For legal advice regarding estate planning, the reader should contact his/her lawyer.
Daniel D. Smith is a partner in the law firm of Smith & Pugh, PLC, 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-777-6084, www.smithpugh.com).
Amy V. Smith Wealth Management, LLC is an independent firm. Amy V. Smith, CFP, CIMA offers securities through Raymond James Financial Services, Inc., member FINRA/SIPC. Her office is located at 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-669-5022, www.amysmithwealthmanagement.com). Any opinions are those of Amy and Dan Smith and not necessarily those of Raymond James. Raymond James does not guarantee that the foregoing material is accurate or complete and does not provide legal advice. Dan Smith is not affiliated with Raymond James.