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Probate and Trust Litigation

When a loved one passes away, his or her estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed.  If your loved-one owned his or her assets through a well drafted and properly funded living trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased’s assets.  The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court.

Every probate estate is unique, but most involve the following steps:

  • Filing of a petition with the proper probate court.
  • Notice to heirs under the Will or to statutory heirs (if no Will exists).
  • Petition to appoint Executor (in the case of a Will) or Administrator for the estate.
  • Inventory and appraisal of estate assets by Executor/Administrator.
  • Payment of estate debt to rightful creditors.
  • Sale of estate assets.
  • Payment of estate taxes, if applicable.
  • Final distribution of assets to heirs.

FREQUENTLY ASKED QUESTIONS

What happens if someone objects to the Will?

An objection to a Will, also known as a “Will contest” is a fairly common occurrence during the probate proceedings and can be incredibly costly to litigate.

In order to contest a Will, one has to have legal “standing” to raise objections.  This usually occurs when, for example children are to receive disproportionate shares under the Will, or when distribution schemes change from a prior Will to a later Will.  In addition to disputes over the tangible distributions, Will contests can be a quarrel over the person designated to serve as Executor.

Does probate administer all property of the deceased?

Probate is primarily a process through which title is transferred from the name of the deceased to the names of the beneficiaries.

Certain types of assets are what is called “non-probate assets” do not go through probate.  These include:

  • Property in which you own title as “joint tenants with right of survivorship”.  Such property passes to the co-owners by operation of law and do not go through probate.
  • Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries.
  • Life insurance policies.
  • Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
  • Property owned by a living trust.  Legal title to such property passes to successor trustees without having to go through probate.

Do I get paid for serving as an Executor?

Executors are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased estate.  In addition, you may be entitled to statutory fees, which vary from location to location and on the size of the probate estate.  The Executor has to fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care.  It is advised that the Executor retain an attorney and an accountant to advise and assist him with his or her duties.

How much does probate cost?  How long does it take?

The cost and duration of probate can vary substantially depending on a number of factors such as the value and complexity of the estate, the existence of a Will and the location of real property owned by the estate.  Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay.  Common expenses of an estate include executors fees, attorneys fees, accounting fees, court fees, appraisal costs, and surety bonds.  These typically add up to 2% to 7% of the total estate value. Most estates are settled though probate in about 9 to 18 months, assuming there is no litigation involved.

Litigation

A properly drafted will should clearly identify all beneficiaries and leave no ambiguity surrounding the intentions of the Testator.  Unfortunately, estate planning documents, whether wills or trusts, do not always clearly reflect the intentions of the testator.  Even if the language of the documents is clear, parties may have other reasons to initiate a lawsuit or object to a will.

When someone with standing objects to a will or a trust, the estate might have to be litigated.  This is sometimes referred to as a “will contest.” These disputes can be complex and should be navigated by attorneys with expertise in such matters, including an intimate knowledge of probate court rules and procedures.

Probate Courts

Typically, if a will is involved, a probate court will determine whether or not it is valid and should be executed. If the will is found to be valid, the court will oversee the allocation of assets and will ensure that the named executor carries out the wishes of the decedent in a lawful and timely manner. The court also oversees the distribution of assets if the testator, or deceased person, died intestate, without a valid will.

Who Can Contest a Will?

A protesting party may only contest a will if he or she falls within one of two categories.  First, those mentioned in the will, known as the will’s beneficiaries, may formally challenge it.  Alternatively, if the challenger stands to inherit according to laws of intestacy (such as a family member), but is not named in the will, or is expressly disinherited, he or she may seek to contest.  If one is not named as a beneficiary in the will and is not a family member eligible for inheritance, known as a distributee, he or she may not pursue a formal challenge.

In order to successfully contest a will, the protesting party must prove that the will is invalid.  There are several scenarios under which a will may not be admitted, including but not limited to:

  • Undue influence – If the testator altered his or her will under the threat of force or other persuasion, it is said that he or she was under undue influence.
  • Mental incapacity – Similarly, if the testator is shown to have been in an incapacitated or otherwise impaired mental state at the time the will was executed, it may be considered void.
  • Will does not follow procedure – A will may be contested if it was signed in the absence of witnesses, was not signed by the testator, or is otherwise not executed according to the law.
  • The will was revoked – If the will was revoked after it was signed, it will also be considered void.  A subsequent will, marriage, or legal action may also revoke a will.
  • Fraud – Lastly, the protesting party can contest if he or she has proof that the testator was deliberately misled by a third party.

When there is no Will

In instances where no valid will exists then intestacy laws which indicate what assets each family member is to receive go into effect.  Typically, inheritance is granted to family members according to a specific order.  Once the decedent’s debts have been paid from the estate, the remaining assets are distributed among the testator’s spouse, children, parents, siblings, grandparents, grandchildren, or great-grandchildren.  Family members who are half-blood relatives are generally considered as if they were full-blood.

Without the guidance of an estate litigation attorney, the web of rules involved in the process can be overwhelming and lead to serious errors or even forfeiture of one’s rights.  Whether you are an executor, trustee, beneficiary or someone improperly left out of a will, contact our estate litigation attorneys to discuss your options.