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When a loved one passes away, the last thing on their mind is how to handle the estate. It’s hard enough to think about that person not being there anymore… Inherited real estate typically goes through the probate process.
You may be the personal representative of an estate and tasked with sorting through all the assets, liabilities, taxes and other considerations that go into settling an estate. Or you may have inherited property from a loved one who passed away without making specific arrangements for their real estate holdings.
If you are in charge of selling inherited property in Virginia, check out our complete guide to ensure the inheritance process goes smoothly. This guide will step you through the probate process in Virginia and provide in-depth details on selling your inherited property (including an out of state sale).
- The probate process requires documentation including a will (if it exists) to be filed with the county or city circuit court.
- Expect several settlement costs including court fees, probate tax, and any attorney fees.
- Selling with an agent will require preparing the inherited property whereas selling with an investor can be done as-is.
- If you decide not to sell your inherited property, you can try renting it out or moving into the home.
Table of Contents
1. How To Sell Inherited Property in Virginia
2. What Documents are Required to File for Probate?
3. What Documents are Required at Time of Probate?
4. Where Do You Probate A Will in Virginia?
5. Probate and Settlement Costs in Virginia
6. Paying Taxes on Inherited Property
7. Should I Fix Up an Inherited Property before Selling?
8. Should I Sell Directly or Pay a Realtor?
9. Alternatives to Selling Inherited Property in Virginia
10. Frequently Asked Questions: Selling Inherited Property in Virginia
How To Sell Inherited Property in Virginia
When selling inherited property in Virginia, the probate process typically needs to happen first unless it qualifies as a small estate or there was a trust instead of a will.
What is Probate?
Probate is the legal process to settle the estate of a deceased person by either proving a will in court or administering the estate if there is no will.
Probate can be split into three stages…
The begins when a person dies and either has a will that needs validated or has yet to provide for their final wishes in any written document (such as a will). If somebody died without having written out their last wishes, then the court does administration to figure out who should be in charge of settling the final affairs of his or her estate.
The involves collecting all bank and brokerage accounts as well as organizing final taxes for both federal and state tax purposes. An appraisal may be ordered by the court to assess the value of all assets, as this can affect federal estate tax and capital gains tax.
The is taking what’s left and making sure that all heirs or beneficiaries (or anyone entitled to something) take their share.
How Long is the Probate Process In Virginia?
The probate process can be time-consuming but varies estate to estate. You should expect probate to last anywhere from six to nine months in Virginia (although a complicated estate can take longer). There are many factors that can drag out the probate process causing it to take longer than a year such as the number of heirs or beneficiaries, whether or not the beneficiaries agree on what to do with the estate, and contesting of the will.
What Documents are Required to File for Probate?
The Clerk requires information about the will and the testator (a person who signs a will) when filing for probate in Virginia. This information can be given in the forms listed below. These forms can be downloaded and completed before your appointment with the Clerk or with the assistance of the Clerk during the appointment.
1. Descendent’s Will
To be valid under Virginia law, the will must be in writing and signed by the testator. If not signed by the testator, it must have been signed by someone in the testator’s presence and with his/her direction. Anyone can present a will for probate, but typically the person who intends to qualify as the personal representative presents the will.
2. Probate Information or Memorandum of Facts
The decedent’s full name, address, place and date of death, and marital status, which can be found on the death certificate is required when filing for probate. There may be other information requested that can be found in the will itself. The person seeking the probate appointment will have to include personal information about him/herself, as well.
3. Probate Tax Return
The Clerk will assess a “probate tax” on the value of the decedent’s real estate in Virginia and the decedent’s personal property. The probate tax return reports the value of the assets subject to this tax. The probate tax must be paid at the time of probate.
4. List of Heirs
A list of heirs is required from the personal representative at the time of qualification in Virginia according to Virginia Code section 64.2-509. This list identifies the decedent’s family members who would be entitled to inherit the estate. The names, addresses, ages, and degree of kinship of these heirs must be provided.
What Documents are Required at Time of Probate?
The personal representative is required to file the will, death certificate, and a check to pay fees at the time of probate in Virginia. In some instances, additional documents are required. The notable documents required at the time of probate are outlined below.
1. Original copy of the will (if there is one).
2. Certified death certificate or, in certain cases, a death notice from the newspaper. Check with the Clerk’s Office involved ahead of time.
3. A check to pay the Clerk’s fee and the probate tax.
4. If a surety bond is required (a surety bond is a bond designed to protect the executor of an estate from lawsuits due to a mistake or intentional failure), you should arrange to have a representative of an insurance company appear at the time of probate. Check with your Clerk beforehand to see if they handle the arrangements for surety.
5. If a person nominated as executor of the will declines, a letter to that effect from the person nominated must be brought to probate. Depending on your jurisdiction, the Clerk may require this letter to be notarized.
Where Do You Probate A Will in Virginia?
In Virginia, the will should be probated in the circuit court of the county or city where the decedent resided at the time of death. Unlike other states, Virginia has no separate probate court.
If the decedent had no known place of residence or passed away in a nursing home, the will should be probated in the county or city where the decedent owned real estate. For example, the decedent passed away in a nursing home in Loudoun County but owned a home in Fairfax County– the will would be probated in the Fairfax County Circuit Court.
Should I Fix Up an Inherited Property before Selling?
The process of fixing up an inherited property varies from person to person depending on the condition of the home. You’ll probably want to make some upgrades and take out any memorabilia you or your siblings want to keep. You can also work with an estate sale service to list and sell all remaining belongings in the home before selling.
When making upgrades focus on the necessary repairs such as plumbing leaks, broken windows or doors, and a leaky roof. All of these tasks will depersonalize the home and help attract buyers.
Advantages of Selling Inherited Property As-Is
Another option is working with a local cash home buyer who can purchase the home as-is, so you don’t need to spend time or money on repairs. A local investor is a good choice when you live far away from the property you inherited or just don’t want to deal with the hassles of bringing the home up to market standards.
Probate and Settlement Costs In Virginia
There are several fees and settlement costs associated with a property going through probate. These probate costs include court costs, probate tax, reimbursement to the personal representative, attorney’s fees (if applicable), and a personal representative’s surety bond (if required).
1. Court costs: This includes filing fees and clerk’s fees, which usually average to around $20.
2. Probate tax: In Virginia, the probate tax is 10 cents per $100 of the value of the estate, as provided in Virginia Code Section 58.1-1712. Depending on where the property is located, an additional 3.33 cents per $100 of value of the estate could be added as a local tax.
3. Personal representative’s fee: This fee can fluctuate between 2% and 5%. However, the fee typically averages 5% of the value of the probate estate plus the estate income in Virginia. This fee is paid to the personal representative of the estate.
4. Attorney’s fee: A probate attorney typically charges by the hour. Reach out to a local probate attorney to determine the hourly rate.
5. Personal representative’s surety bond cost (if required): This cost starts around $250 for small estates.
Paying Taxes on Inherited Property
Virginia Estate Tax
There is no Virginia estate tax or inheritance tax. This estate tax was repealed July 1, 2007.
Federal Estate Tax
A federal return must be filed when the total of the gross estate plus all lifetime taxable gifts (other than “annual exclusion” gifts) exceeds the “applicable exclusion amount” (specified in federal law) for the year of the decedent’s death. The amount is adjusted annually for inflation, so it is important to check the exclusion amount for the year of the decedent’s death.
Decedent’s Income Tax
The decedent’s final income tax return covers the portion of the last calendar year that the decedent was alive. For a calendar year taxpayer (someone not filing quarterly taxes), the decedent’s final federal income tax return is due on April 15 of the year following the decedent’s death. In addition, his/her Virginia income tax return is due on May 1 of that year.
How To Sell an Inherited Property Out Of State
A real estate investor is a great option for selling inherited property if the executor or any beneficiaries are not local to where the property is located. An investor can purchase the house in as-is condition for cash, so the surviving spouse or inheritor(s) don’t have to hassle with hiring contractors to fix the place up. In addition, open houses and realtor fees can be avoided– fast forwarding past this work will make selling inherited property from out of state much easier.
Unlike selling on the market with an agent where buyers require financing and include contract contingencies such as formal inspections and appraisals, a cash investor offers a guaranteed sale without these contingencies or financing. A virtual closing will allow you to sign the required closing documents out of state, so you can get paid for your inherited property in Virginia.
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Alternatives To Selling Inherited Property in Virginia
1. : Want a second stream of monthly income? Consider renting out your inherited property or posting it on AirBnb. Depending on the local neighborhood rental rates, this could be a profitable investment. You can also take advantage of the appreciation by holding onto the property. If you live far away, create a plan as managing rental property from a long distance can cause more headaches than the monthly income is worth.
2. : If you’re not in need of the cash from selling the inherited property, moving in could be more convenient and save you money if the mortgage is paid off. Not to mention it gives you more time to consider selling and upgrade the property in the meantime (this is great if you’re interested in selling by owner).
FAQ: Selling Inherited Property in Virginia
Can I Force the Sale of Inherited Property?
In short, yes, you can force the sale of inherited property in Virginia. This is true even if you are the minority owner through partition action. Partition action is where the court helps decide who gets what from the sale of the property and the property is sold at a sheriff’s auction to the highest bidder (similar to how a foreclosure auction happens).
Partition actions are typically used as threats to show the other party that you are serious. The hope is that everyone can come to an amicable agreement outside the courtroom because this type of situation is typically “lose-lose.” The final profit from the sale will be split according to ownership of the title minus all attorney fees, auction fees, and court fees.
Does Majority Rule When Selling Inherited Property?
No, majority does not rule when selling inherited property, which is why an inheritor can force the sale of a property (explained above). However, if the majority of inheritors want to sell, they can take it up with a judge who will require that home be sold and dispersed appropriately according to what was specified by the decedent’s estate plan before passing away.
If there is more than one sibling who wants to get rid of the house that was left for them in the will, then it’s important for them to file a partition suit with the circuit court of the county or city in Virginia.
How Can I Avoid Probate In Virginia?
In Virginia, creating a living trust can help a successor avoid probate. You need to create a trust document that will serve as your last will and testament when you die (the same thing attorneys do for clients). However, you will designate someone else (known as a successor trustee) who is responsible for the living trust after it’s signed.
Final Thoughts: Selling Inherited Property in Virginia
Selling inherited property in Virginia can be a difficult process. There are many things to consider, and you should consult with an attorney before signing any of the probate documents. I hope this article has helped shed some light on what steps need to happen when selling an inherited home, as well as how much money might change hands depending on who inherits it.
If you want to sell your inherited home in Virginia, there is no better place than The House Guys for all of your real estate needs. We’re here 24/7 with the help and guidance that will take the stress out of this process, so you can get on with living the life you want. No matter what type of property you inherited, our trusted experts are ready and waiting for your call today! (571) 207-5171
