Probate in Virginia

Broadly stated, probate is the process of administering a deceased person’s (decedent’s) estate. In Virginia, the Circuit Court has jurisdiction over the probate process. The process is initiated by the filing of a Last Will and Testament, if one exists, and the qualification of a Personal Representative to administer the estate. It is the Personal Representative’s responsibility to locate and marshal the decedent’s assets, pay the decedent’s final debts, expenses, and taxes, and distribute the assets to the proper beneficiaries. Every state has different probate practices and procedures and probate may not always be necessary. When a loved one passes away, the surviving interested parties should consult with an attorney about the necessity of probate and the probate process.

Definitions

Testate: If someone dies with a valid Will, it is known as dying “testate.” In this case, the terms of the Will control the disposition of the decedent’s assets, and the person or institution named as Executor in the Will must qualify as Executor or must formally renounce qualification. The Executor has an obligation to administer the decedent’s estate not only in accordance with the decedent’s Will, but also in accordance with Virginia law.
Intestate: If someone dies without a valid Will, it is known as dying “intestate.” In this case, Virginia’s laws of intestacy control and these intestacy laws dictate who inherits the assets of the estate. The priority of beneficiaries is outlined in § 64.2-200 of the Virginia Code. Within 30 days of the decedent’s death, the sole heir or any heir with consent of the other heirs may qualify as Administrator of the intestate estate. After 30 days, any heir may qualify as Administrator. The administration of an intestate estate is similar to the administration of a testate estate.
Personal Representative: A Personal Representative is a general term used to refer to any individual or qualified business entity who has qualified as a fiduciary of a decedent’s estate—whether that be an Executor or Administrator. In general, following the death of a decedent, a Personal Representative needs to contact the Probate Division of the Circuit Court Clerk’s office in the county or city where the decedent (i) had a known place of residence; (ii) if no known place of residence, then where he or she owned real estate; or (iii) if no real estate, then where the decedent died, to schedule an appointment to qualify as Executor or Administrator of the decedent’s estate.
Executor/Executrix: The individual or qualified business entity named in the decedent’s Will as Executor. The Executor (or Executrix, as is sometimes used to refer to female Executors) is only vested with authority after having qualified with the Clerk of the Circuit Court following the death of the decedent. As detailed below, the Executor marshals the decedent’s assets, pays any debts or taxes owed, and distributes the assets to the devisees and legatees of the testate estate in accordance with the decedent’s Will.
Administrator/Administratrix: The individual or qualified business entity appointed by the Clerk of the Circuit Court to administer a decedent’s estate when the decedent died intestate. An Administrator (or Administratrix, as is sometimes used to refer to female Administrators) is only vested with authority after having qualified with the Clerk of the Circuit Court following the death of the decedent. The procedure for the appointment of an Administrator is outlined in Virginia Code § 64.2-502.
Administrator c.t.a. (or cum testamentor annexo): The individual or qualified business entity appointed by the Clerk of the Circuit Court to administer a decedent’s estate when the decedent did not name an Executor in his or her Will or when all named Executors are unable or unwilling to serve as such. The procedure for the appointment of an Administrator c.t.a. is outlined in Virginia Code § 64.2-500.
Administrator d.b.n.c.t.a. (or de bonis non cum testamentor annexo): The individual or qualified business entity appointed by the Clerk of the Circuit Court to administer a decedent’s estate if the initially appointed Executor or Administrator dies, resigns, or is removed before the probate estate has been closed. The procedure for the appointment of an Administrator d.b.n.c.t.a. is outlined in Virginia Code § 64.2-500.
Commissioner of Accounts: The judges of each Circuit Court shall appoint as many Commissioners of Accounts as may be necessary to generally supervise all fiduciaries admitted to qualify in the Court or before the Clerk of the Circuit Court. Commissioners of Accounts are discreet and competent attorneys at law, and make all ex parte settlements of the fiduciaries’ accounts. See Virginia Code § 64.2-1200.
Notice of Qualification: A Personal Representative of a decedent’s estate, or a person who probates a decedent’s Will when there is no qualification, is required to give written notice of qualification to certain persons who may have an interest in the estate. The requirements for notice are outlined in Virginia Code § 64.2-508. Notice must be given within 30 days of qualification by the Personal Representative or proponent of the Will. The Personal Representative must also file an affidavit with the Clerk of Court confirming that such notice was given within 4 months of qualification.
Inventory: Within 4 months of qualification, the Personal Representative must file an inventory listing all probate assets at their date-of-death value with the Commissioner of Accounts. Specifically, the inventory lists personal estate under the Personal Representative’s supervision and control, the decedent’s interest in any multiple party account in any financial institution, all real estate over which he has the power of sale, and any other real estate that is an asset of the decedent’s estate, whether or not situated in the Commonwealth. See Virginia Code § 64.2-1300.
Accounting: Each Personal Representative is required to file an accounting with the Commissioner of Accounts annually to state all property which the Personal Representative is responsible for within 12 months from the date of qualification. The accounting reviews the estate’s activity during the first 12 months following qualification and is due 16 months after the Personal Representative’s qualification. The Personal Representative must file subsequent accountings annually, which are due within 4 months of the accounting period.
Statement in Lieu of Accounting: If all of the distributees of a decedent’s estate or all residuary beneficiaries under a decedent’s Will are Personal Representatives of that decedent’s estate, the Personal Representative may, in lieu of the settlement of accounts required by the Commissioner of Accounts, file a statement under oath that (i) all known charges against the estate have been paid, (ii) 6 months have elapsed since the Personal Representatives qualified in the Clerk’s office, and (iii) the residue of the estate has been delivered to the distributees or beneficiaries. See Virginia Code § 64.2-1314.

Initiating Probate

Determine If There Is a Valid Will. The first step is to determine whether there is a validly executed Last Will and Testament. The requirements for a valid Will in Virginia are outlined in § 64.2-403 of the Virginia Code. The Will must be in writing, signed by the testator or by some other person in the testator’s presence and by his direction, in such a manner as to make it manifest that the name is intended as a signature. A Will wholly in the testator’s handwriting is valid if the testator’s handwriting and signature are proven by at least two disinterested witnesses. A Will not wholly in the testator’s handwriting is not valid unless the signature of the testator is made, or the Will is acknowledged by the testator, in the presence of at least two disinterested witnesses who are present at the same time and who sign the Will in the presence of the testator. In addition, some Wills are “self-proved,” which means the testator and witnesses signed before a notary public. These Wills include a “self-proving affidavit” which is found at the end of the Will.
Initiation of Probate and Qualification of Personal Representative. The person who intends to qualify as Personal Representative should schedule an appointment with the Clerk of the Circuit Court in the proper jurisdiction. A probate matter will generally be opened in the county or city in which the decedent resided at the time of his death. There are a number of items which the qualifying Personal Representative should bring with him to the probate appointment including the original Will and any Codicils (supplement to a Will), if any, a certified copy of the death certificate, an estimate of the probate assets (solely-owned assets of the decedent), the names, ages, and addresses of the decedent’s heirs-at-law, valid photo identification, and a form of payment for any probate fees and taxes. If the Personal Representative is not a resident of Virginia, he should bring a Virginia resident to the appointment. The Virginia resident will serve as resident agent for the estate and the agent’s primary responsibilities will be to forward any estate correspondence to the Personal Representative. In most cases, a non-resident Personal Representative must also arrange for a surety bond. This surety bond protects the estate and the beneficiaries from harm caused by misbehavior or mismanagement by the Personal Representative.
Personal Representative’s Notice of Qualification. When the Personal Representative qualifies, the Clerk will issue Certificates of Qualification, also sometimes known as letters testamentary. This is the written document imprinted with the Court’s seal that authorizes the Personal Representative to act on behalf of the estate. Within 30 days of qualification, the Personal Representative is required to provide written notice of the opening of the probate matter and the qualification of the Personal Representative to certain interested parties, namely the decedent’s heirs-at-law and rightful beneficiaries. See Virginia Code § 64.2-508. Within 4 months of qualification, the Personal Representative must also provide an Affidavit to the Court confirming that he has sent the requisite Notices to the necessary parties.

Handling the Administration of a Decedent’s Estate

Inventory and Value the Decedent’s Assets. Upon qualification, the Personal Representative is assigned a number of rights, responsibilities, and powers. Importantly, one of the Personal Representative’s first tasks is to identify and collect the decedent’s assets. The Personal Representative might start his search by reviewing the decedent’s mail, important papers, and tax returns. A conversation with the decedent’s accountant, financial advisor, or estate planning attorney might also be helpful, as oftentimes the decedent’s advisors maintain financial information in their files. The Personal Representative must then determine date-of-death values for all the decedent’s assets. There are various valuation methods depending on the type of asset and sometimes professional appraisals are appropriate or necessary. Within 4 months of the date of qualification, the Personal Representative is required to file an Inventory of estate assets with the Commissioner of Accounts. See Virginia Code § 64.2-1300. The Inventory provides a detailed list of all probate assets and the fair market value of such assets as of the date of death.
Decedent’s Final Income Tax Returns. A Personal Representative of a decedent’s estate (or a surviving spouse if there is no appointed Personal Representative) is responsible for filing final individual income tax returns (IRS Form 1040 and Virginia Form 760) for that portion of the year during which the decedent was living. If the decedent was married at the time of his or her death, then such portion of the year can be reflected on a final joint return with the surviving spouse.
Decedent’s Estate Income Tax Returns. The decedent’s estate may also have a duty to file its own fiduciary income tax returns (IRS Form 1041 and Virginia Form 770) for any income earned by the estate after the decedent’s death until the closing out of the estate. If the estate has gross income of $600 or more during a taxable year, then it has an obligation to file fiduciary income tax returns. Oftentimes, even if an estate does not have any income-producing assets, if an IRA or any other pre-tax qualified retirement accounts are payable to the estate, then the income produced by these accounts will cause the obligation to file fiduciary income tax returns.
1. The estate is also allowed deductions on fiduciary income tax returns for fiduciary fees, attorney and accountant fees, and any other costs which are paid or incurred in connection with the administration of the estate, so it is important to keep track of all deductible expenses in an estate. An estate acts as a quasi-pass through entity for tax purposes so that if the estate makes distributions, then it passes its taxable income out to the beneficiaries who received distributions on federal schedule K-1. If the estate does not make distributions during the taxable year, then all of the net income will be subject to tax at the estate level. In the final year of an estate, the estate should not have any tax obligation, as all of its assets (and thus taxable income) will have been passed out to beneficiaries.
2. An estate has the option to elect a fiscal year that begins with the decedent’s date of death and ends on the last day of the month prior to the first anniversary of the decedent’s death. The use of a fiscal year can be valuable when planning on closing out an estate within one fiscal year or to defer income being passed out to the estate’s beneficiaries on a schedule K-1.
Estate Tax. For some estates, there may be an obligation to file a federal estate tax return (IRS Form 706) if the decedent’s gross estate (including taxable gifts made during the decedent’s lifetime) exceeds a threshold amount. For 2020, that threshold amount is $11,580,000. Virginia has no state estate tax, but other states do have state estate or inheritance tax, so if the decedent owned property in other states, there may be a requirement to file a state estate tax return. In addition, there could be circumstances in which the decedent’s gross estate does not have an obligation to file a federal estate tax return, but it would be advisable to file an estate tax return for portability so that the surviving spouse is able to utilize the decedent’s remaining exemption amount at his or her death. For this and many other reasons, it is strongly recommended that individuals contact a CPA or attorney about estate tax issues.
Pay Debts, Claims Against Estate, and Administrative Expenses. In addition to paying any tax liabilities, the Personal Representative must pay the decedent’s final bills, debts, any ongoing administrative expenses, and must satisfy any claims against the estate. If there are sufficient estate assets to fully satisfy any debts and claims, the Personal Representative may pay them in any order. However, if there are insufficient estate assets to fully satisfy any debts and claims, the Personal Representative must take extreme care to pay them in the proper order of priority as determined under relevant law. Virginia Code § 64.2-528 outlines the order in which debts are to be paid. Broadly speaking, a Personal Representative is not personally liable for satisfying the decedent’s debts, but if the Personal Representative does not satisfy the debts in the proper order or as prescribed in the Will, or if the Personal Representative does not act in good faith, he may become personally liable. During the period of administration, creditors may make claims against the estate. It is the responsibility of the Personal Representative to determine the validity of these claims. There is a procedure available to a Personal Representative in Virginia to eliminate the risk that he will become personally liable for any later-discovered creditor claims against the estate. The Personal Representative can request the Commissioner of Accounts to hold a Hearing for Proof of Debts and Demands (Virginia Code § 64.2-550) and then can obtain an Order of Distribution (Virginia Code § 64.2-556).
Estate Accounting and Distribution of Assets to Beneficiaries. During the period of estate administration, the Personal Representative is responsible for safeguarding and managing all the probate assets while they are in his or her possession. Virginia Code § 64.2-1206 requires that the Personal Representative file an annual Account with the Commissioner of Accounts detailing all of the estate activity. The first Account must be filed within 16 months from the date of qualification. Subsequent Accounts must be filed covering a period of 12 months. In general, the Account will document all of the receipts, gains, losses, disbursements, and distributions. Disbursements must be verified through supporting documentation. The Account must also show all of the distributions to the rightful beneficiaries. If the decedent died testate, the Executor must distribute the assets to the beneficiaries named in the Will. If the decedent died intestate, the Administrator must distribute the assets to the heirs-at-law as determined under the laws of intestacy. It is prudent to obtain signed receipts for distributions. A final Account will show that all of the assets have been distributed out of the estate to the beneficiaries. When the Personal Representative files the final Account, he must also submit to the Commissioner of Accounts a Tax Certificate proving that he has exercised diligence in paying the necessary taxes. Finally, Personal Representatives are entitled to be compensated for their service in administering and settling estates. Virginia Code § 64.2-1208 allows for “reasonable compensation.” While this may seem like a vague definition, the Commissioner of Accounts offers guidelines as to the allowable fiduciary fee.

Seeking Professional Help

Estate or Probate Attorney. The probate process in Virginia can seem elaborate and rigorous and an unfamiliar party. There are many requirements that Personal Representatives must comply with, but there are also opportunities to simplify the process and mitigate personal liability. Anyone who needs assistance in navigating the probate process would be well-advised to consult with a knowledgeable attorney experienced in estates and probate administration.
Tax Attorney or CPA. Likewise, the final individual income tax return of a decedent and an estate’s fiduciary income tax return are complex in nature. Because these tax returns require allocation of income among specific portions of the year and allow for deductions that are not commonly taken on an individual income tax return, it is always best to consult with a tax preparer, CPA, or attorney about the specifics of preparing these returns. IRS Publication 559 for Survivors, Executors, and Administrators (https://www.irs.gov/pub/irs-pdf/p559.pdf) is a very good resource for more in-depth analysis of income-tax related issues after the death of a decedent.

Frequently Asked Questions

I am named as the Executor in my parent’s Will. Am I required to qualify and probate the Will?

No. There is no requirement to probate a Will and qualify as an Executor. However, you may not secrete or purposefully hide a Will. In determining whether to probate a Will and qualify as a Personal Representative, you should consider the title, value and nature of the assets. If the assets are less than $50,000, a full probate may not be necessary. If the assets are joint, pay on death or have named designated beneficiaries, similarly, a probate may not be necessary. If the decedent only owned real estate, probating the Will without qualification may only be required to transfer the real estate. Nonetheless, if the decedent owned personal property in his or her sole name, probate of the Will and qualification as a Personal Representative is necessary to transfer the assets.

Does a beneficiary designation override a gift made by Will?

Generally, yes. If a beneficiary is validly designated on an account or asset, the designee receives the account and the account is not subject to the probate process.

How long does it take to probate a Will?

Probating a Will can be quick, often depending on how soon the Probate Office at a Circuit Court can schedule an appointment. The appointment can take about an hour but the person or proponent of the Will must be there in person. It is nearly the same procedure to qualify as the Personal Representative.

What happens if I cannot find the original of the Will in which I have been named as Executor?

If the original Will cannot be located, the proponent of a lost Will may bring a civil action to admit a copy of the proposed original Will to probate. It is presumed a Will that is lost is destroyed. Evidence must be offered to the Court to overcome that presumption and prove the Will was simply lost and not revoked.

How does a revocable living trust avoid probate?

Simply by law – the probate process (i.e., the Circuit Court’s supervision of the actions of an Executor of a Will) does not apply to trustees of a revocable trust. Trustees under a revocable living trust do not need to “qualify” to receive power from the Court. Rather, a trustee’s powers are as provided in the trust document and in Virginia law. Thus, the actions of a trustee are not subject to the probate process.

How can I withdraw after being appointed an Executor/Administrator?

You should contact the Probate Clerk’s office where you qualified for specific instructions. A withdrawal needs to be made in writing and you will be required to prepare a final Accounting. You should also ensure the bonding company is notified of your withdrawal.

What are the fees associated with the probate process?

Besides the probate taxes noted below, there are fees involved with the various reports that must be filed with your assigned Commissioner. These reports include an Inventory and an Accounting (also called an Account). The fees are relatively small: $275 is the maximum fee for an Inventory, and for an Account, the fee is graduated; for estates that exceed $1 million in assets, the fee for an Account is $1,320 plus .00075 in excess of $1 million, but not to exceed $11,000, except as may be approved by the Court. Also, recording charges per page of the Account apply (these are relatively minimal).

Are there probate taxes?

Yes, there are state and local probate taxes. For estates with $15,000 or less of assets, no probate tax is imposed. For estates with greater than $15,000 of assets, a state tax of 10 cents per $100 is imposed, including on the first $15,000, and the local tax can be up to 33% of the state tax. Put differently, a common total probate tax in many jurisdictions is $1.33 per $1,000. For example, an estate with $400,000 of probate assets would result in $532 of probate tax.

Must I pay an estate or “death” tax?

Possibly, if you have assets in excess of the applicable IRS exemption. There are federal and state “death” taxes, which are also referred to as “transfer taxes” and apply when you transfer wealth at your death, to your heirs. However, the IRS does not tax all of your wealth. Instead, the IRS exempts from tax a certain amount of your assets (in 2020, the exemption is $11.58 million). So, if you died in 2020 and had a net taxable estate (after deductions, etc.) in excess of $11.58 million, you would pay estate tax on the excess. The top estate tax rate is 40%.

Does Virginia have a state estate tax?

No. But some states do have an estate tax; among those are Pennsylvania, Maryland, New Jersey, and Connecticut (this list is not exhaustive). Determine if the decedent has any assets in a state that has estate tax. If so, the decedent’s estate may owe taxes to that state. For example, a deceased resident of Virginia who owns a second home in Connecticut may have estate tax to pay to the state of Connecticut.

Why do I need an EIN for the estate?

The IRS considers an estate to be a separate, tax-paying entity. Because an estate can own assets, earn income, and have deductible expenses, that income and those expenses need to be reported to the IRS. The estate files a Form 1041 income tax return, and in order to file this, its Executor must obtain an EIN (employer identification number) for the estate.

Am I entitled to compensation for serving as Executor/Administrator? How much?

Virginia law entitles a fiduciary to reasonable compensation. However, you must also review the terms of the Will to confirm it allows for compensation. (Many Wills state that an Executor is entitled to “reasonable compensation,” and some Wills provide for a specific dollar amount or percent amount for compensation.) If by chance a Will specifically bars compensation, you could discuss this with the beneficiaries and your assigned Commissioner and perhaps come to an agreement on compensation. But, assuming a Will allows for reasonable compensation, guidelines exist as to what “reasonable compensation” is. Those guidelines allow an Executor to be paid 5% of income receipts (excluding capital gains) in each accounting period. In addition, an Executor may be paid 5% on the first $400,000 of estate assets, 4% on the next $300,000 of estate assets, 3% on the next $300,000 of estate assets, and 2% on assets exceeding $1,000,000. If an estate has assets exceeding $10,000,000, the Executor should discuss compensation with the Commissioner.

Can I hire professional help (attorney, CPA) and pay that amount from the estate?

You can and should seek professional help in settling an estate. This would include hiring attorneys, CPAs, investment advisors, etc. However, if you are the Executor, the money you pay to those professionals may reduce your Executor fee…specifically, if they perform for you what are considered to be duties of the Executor (e.g., handling distributions, preparing probate forms such as the Inventory and Account).

When can I pay beneficiaries, and should I get them to sign receipts?

You should always obtain receipts. Estates can be held accountable for claims for up to a year, but Executors can make distributions as early as 6 months. Ensure you have confirmed all debts before disbursing any funds. You can make partial disbursements as well, and many Executors will consider a smaller partial distribution soon after the date of death. Seek the advice of an attorney in regard to timing of distributions and steps you can take to protect yourself as Executor from debts of the estate.

What kind of documentation must I file with the Accounting?

Include all bank statements, brokerage statements, etc., and cancelled checks (checks are often imaged on bank statements) for the entire period covered by the Account. Include receipts from beneficiaries for distributions. If you reimburse yourself as Executor, be sure to include receipts, and an itemized summary of those receipts for the reimbursed expenses. Include receipts for all expenses.

Must I open an estate account in an interest-bearing account? What happens if I do not?

Yes, you should open an interest-bearing account for the estate. It is possible for the Executor to be held responsible for lost income if you do not use an interest-bearing account.

How do I get help administrating an estate?

You should retain an attorney who works regularly in estate administration. Word-of-mouth referrals are best, so ask your friends and contacts if they have a probate attorney they have used. A simple Google search for “estate planning attorney” or “probate attorney” might also yield results. Alternatively, try searching online for “estate planning council” combined with the area where you need to administer the estate. (For example, the following areas/cities have their own councils: Hampton Roads, Richmond, Northern Virginia.) In Virginia, many probate attorneys are members of estate planning councils, and the council directories are often published online.

What if the amount in an estate is small? Do I still have to go through probate?

The Virginia Small Estate Act provides a means by which certain small assets owned by a decedent can be transferred and collected at death without a formal administration. There are two procedures for doing so based on the value of the asset(s). First, if the value of the decedent’s combined assets is less than $50,000, a Small Estate Affidavit can be used 60 days after death; however, there are several requirements to use the Affidavit, including filing (or probating) the Will, if any, and claiming you are entitled to the assets and the basis for that claim. Second, if the decedent owned an asset with a value of $25,000 or less, an Affidavit can also be used, with less requirements. In that situation, the claimant only needs to wait 60 days after death and then confirm no appointment of a Personal Representative is pending or has been granted.

What does it mean to probate the Will “without qualification”?

The Will must be probated if the decedent owned any real estate that did not pass by survivorship. The probated Will has the same effect as a deed in passing title to a beneficiary under the Will. Probate of a Will solely to pass title to real estate does not require qualification of a Personal Representative. Probate without qualification of a Personal Representative does not require many of the traditional probate requirement such as Inventories and Accountings.

Are a decedent’s personal property and real estate handled differently in probate?

Personal property such as stocks, bonds, cash, business interest, and tangible personal property must all go through the normal probate procedure, unless passing by survivorship, to transfer title to a beneficiary. Real estate owned by a decedent transfers automatically when such decedent’s Will is probated with a Circuit Court. The nature of the automatic transfer has resulted in most people in the legal field referring to that transfer as “dropping like a rock.” It should be noted, to the extent personal property in an estate is not sufficient to satisfy a decedent’s debts, the real estate may be subjected to the payment of those debts and a Personal Representative may be required to exercise a power of sale, thereby divesting the beneficiaries of title to the real estate.

How quickly can real property be sold from an estate?

If real property is sold within one year of the decedent’s death, the purchaser and the title company will insist on certain protections against creditors who have valid claims against the estate but have not yet asserted them. In addition, parties with an interest in the estate will not yet have had the full one-year period in which to file a complaint to contest the validity of the Will. If the real property is sold within one-year of the decedent’s death, the proceeds for sale can be held in an escrow account which is available to the Personal Representative to pay legitimate estate expenses. Also, in some cases, it is possible to obtain a surety bond allowing the beneficiaries to obtain the sale proceeds.

What happens to someone’s debts when they die?

Death does not extinguish the claims against a person. Probate is designed to protect the right of beneficiaries and creditors. Each creditor has a right to file his, her, or its claim against the estate with the Commissioner of Accounts. The Commissioner then adjudicates the claim on its merits and reports to the Court. If a claim is uncontested by a Personal Representative, the Personal Representative and the Claimant can agree to the terms of payment. Filing a claim with the Commissioner can be done informally.

What happens when a decedent’s debts exceed the assets in an estate?

Estates lacking sufficient assets to pay all claims against such estates present unique problems. Section 64.2-528 of the Virginia Code provides a list of priority of claims, or who gets paid first. If the assets are insufficient to pay all of the creditors within a class, the claims with the class get paid ratably. The next level of claim priorities do not get anything. The order of the claims are:

Costs and expenses of administration;
The allowances provided in Article 2 (§§ 64.2-309, et seq.) of Chapter 3;
Funeral expenses not to exceed $4,000;
Debts and taxes with preference under federal law;
Medical and hospital expenses of the last illness of the decedent, including compensation of persons attending him not to exceed $2,150 for each hospital and nursing home and $425 for each person furnishing services or goods;
Debts and taxes due the Commonwealth;
Debts due as trustee for persons under disabilities; as receiver or commissioner under decree of Court of the Commonwealth; as Personal Representative, guardian, conservator, or committee when the qualification was in the Commonwealth; and for moneys collected by anyone to the credit of another and not paid over, regardless of whether or not a bond has been executed for the faithful performance of the duties of the party so collecting such funds;
Debts for child support arrearages;
Debts and taxes due localities and municipal corporations of the Commonwealth; and
All other claims.

Note: No preference may be given in the payment of any claim over another claim of the same class. A Personal Representative who pays a debt before another debt of a higher statutory class is paid will be held personally liable to the unpaid creditor of the higher class.

How are estate debts handled in probate?

The debts and demands hearing is a statutory procedure available to Personal Representatives or estates in Virginia. The procedure affords a method for settlement of accounts or Personal Representatives and the distribution of assets of estates. The procedure is started by requesting a debts and demands hearing before the Commissioner of Accounts. Under the procedure, any claims against the estate must be brought within a specified time; if not, the statutory procedure protects the Personal Representative against any unpaid and unknown claims and any improper distributions that may result, if made in good faith. After the hearing, the Commissioner files a report of the debts and demands with the Court. Exceptions to the report are permitted within 15 days.

Six months after qualification of the Personal Representative, if the Commissioner has filed an approved Accounting and report of debts and demands, the Personal Representative may move for the entry of an order directing any creditor and any other person interested in the estate to appear before the Court to show any reason why the Court should not allow distribution of the estate assets. On or after the designated date, the Court may order the distribution of some or all of the estate assets. A refunding bond may be necessary if the distribution is to occur within a one-year period.

If a Personal Representative acts in good faith to comply with the show cause and order of distribution, and distribution is made in accordance with the order of the Court, a Personal Representative is protected against demands of creditors and all other persons.