Real Estate

Under Virginia law, real and personal property are subject to different rules of administration. Title to real property typically vests in the devisee or heir immediately upon the death of the decedent, whereas title to personal property vests in the personal representative for distribution to heirs or, if necessary, to pay off debt.

The fiduciary may sell the decedent’s real property only if the testator or the Court grants the fiduciary a power of sale over the real property.   Testators frequently incorporate the fiduciary powers set forth in Virginia Code § 64.2-105, which includes the power of sale. 

A fiduciary who qualifies before the court accepts the powers and duties set forth in the will.  While the fiduciary may elect not to use a discretionary power to sell real estate, absent an order of the court, the fiduciary may not divest himself of that power.

In Fairfax, if the fiduciary has no intention and no need to sell the real estate of the decedent, notwithstanding the power of sale granted in the will, the commissioner will permit the removal of the real estate from the probate estate as an adjustment in the first account, provided the fiduciary clearly declares his intent not to sell the property.  In such instances, the value of the real estate is not included in the calculation of the commissioner’s filing fee.

Additionally, the fiduciary is not permitted compensation upon the value of the real estate unless the fiduciary exercises the power of sale. 

It is the duty of the fiduciary to sell so much of the probate assets as the estate may require.  Where the testator grants the fiduciary a power of sale that the fiduciary is required to exercise, a fiduciary must sell the real estate, and make the proceeds available to satisfy creditors.  

Virginia Code § 64.2-531 provides that an asset that is left to a specific person is subject to existing debts that encumber that asset, unless the will clearly and explicitly states otherwise.

When title to the real estate passes to the devisees or heirs at law, those persons become responsible for that real estate’s debts and expenses unless and until the fiduciary exercises the power of sale.  If the estate pays such expenses, it has the potential effect to shift the beneficial interests in the estate from those inheriting the personal property to those inheriting the real property, which is improper.  The Fairfax commissioner will generally permit the estate to pay real estate expenses where the beneficial interests in the estate’s personal property and real property are the same.