People can inherit a variety of assets like a home, money and other items laid out in a will. But what happens with one’s retirement accounts? They can be inherited, but like all other inheritable items, it is important to know what the law says in your state.
What is Probate?
Probate is the legal process of reviewing assets of a deceased person. Probate proceedings will determine inheritors and can review the existence, authenticity and validity of a will; however, probate can be initiated with or without a will.
How Retirement Accounts Can Avoid Going Through Probate
In Virginia, a retirement account does not need to go through probate if it designates a beneficiary. When creating a retirement account, it is standard practice to select a beneficiary to take over the account after you pass. This can help mitigate the need for the probate process.
Why a Retirement Account May Still Be Subject to Probate
However, if you neglect to update your beneficiary when circumstances change, the retirement account could still be subject to probate. If your beneficiary passes before you, you divorce your beneficiary, or you simply change your mind about who you would like to inherit the retirement account, you must change your beneficiary designation to ensure the account reaches your intended heir.
If you fail to name a beneficiary for your retirement account (or if the one named is no longer living without a successor designated), the account will be subject to the probate process.
Consult a Virginia Estate Planning Attorney
Estate planning and beneficiary designation can be complex tasks, which is why it is always best to consult an attorney. Contact Jason Smolen at jdsmolen@smolenplevy.com and Daniel Ruttenberg at dhruttenberg@smolenplevy.com.
About the Authors
Jason Smolen
Jason Smolen is a founding principal of SmolenPlevy. Smolen’s knowledge of complex estate and business issues has drawn the attention of ABC News, USA Today, E! Online, Realty Times and the Bank of America Small Business Online Community. Mr. Smolen is a graduate of the City College of the City University of New York and the George Mason University School of Law. Smolen also serves as a board member of a local citizens association and recently co-authored an article titled Why You Should Think About Spousal Limited Access Trusts (SLATS).
Daniel H. Ruttenberg
Daniel H. Ruttenberg, JD, CPA, LLM is a principal with the firm. Mr. Ruttenberg received his Bachelor of Science degree with a double major in Accounting and Finance from the University of Maryland. He earned his Juris Doctor with Honors from George Mason University School of Law and his Master of Laws in Taxation with Distinction from Georgetown University Law Center. Mr. Ruttenberg also served as the Director of the Fairfax Bar Association (FBA) for seven years. During this period, he was also elected president – the youngest in FBA history and served as a member of the Board of Directors for the Fairfax Law Foundation.
