Virginia Law

Article 5. Liability of Personal Estate to Debts.

The appointment of a debtor of the estate as executor shall not extinguish his debt to the estate.

Code 1950, § 64-142; 1968, c. 656, § 64.1-152; 2012, c. 614.

A. Subject to the provisions of Article 2 (§ 64.2-309 et seq.) of Chapter 3 and excluding personal estate that the will directs not to be sold, the personal representative shall sell such assets of the personal estate where the retention of such assets is likely to result in an impairment of value. In conducting such a sale, the personal representative may give reasonable credit and take bond with good security.

B. If, after the sale pursuant to subsection A, the personal estate is not sufficient to pay the funeral expenses, charges of administration, debts, and legacies, the personal representative shall sell so much of the remaining personal estate as is necessary to pay such obligations. In conducting such a sale, the personal representative shall give as much consideration as practicable to preserving specific bequests in the will and to the provisions of Article 2 (§ 64.2-309 et seq.) of Chapter 3.

C. Unless necessary for the payment of funeral expenses, charges of administration, or debts, the personal representative shall not sell personal estate that the will directs not to be sold.

Code 1950, §§ 64-143, 64-144, 64-145; 1966, c. 331; 1968, c. 656, §§ 64.1-153, 64.1-154, 64.1-155; 1981, c. 580; 2012, c. 614.

Any estate for the life of another shall go to the personal representative of the party entitled to the estate and shall be applied and distributed as the personal estate of such party.

Code 1950, § 64-146; 1968, c. 656, § 64.1-156; 2012, c. 614.

When the assets of the decedent in his personal representative's possession are not sufficient to satisfy all debts and demands against him, they shall be applied to the payment of such debts and demands in the following order:

1. Costs and expenses of administration;

2. The allowances provided in Article 2 (§ 64.2-309 et seq.) of Chapter 3;

3. Funeral expenses not to exceed $4,000;

4. Debts and taxes with preference under federal law;

5. 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;

6. Debts and taxes due the Commonwealth;

7. 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;

8. Debts for child support arrearages;

9. Debts and taxes due localities and municipal corporations of the Commonwealth; and

10. All other claims.

No preference shall be given in the payment of any claim over any other claim of the same class, and a claim due and payable shall not be entitled to a preference over a claim not due.

Code 1950, § 64-147; 1956, c. 231; 1966, c. 274; 1968, c. 656, § 64.1-157; 1972, c. 96; 1981, c. 580; 1986, c. 109; 1993, c. 259; 1996, c. 84; 1997, c. 801; 2007, c. 735; 2008, cc. 666, 817; 2012, c. 614; 2014, c. 532; 2017, c. 591.

No payment shall be made to creditors of any one class until all those of the preceding class have been fully paid, and if the assets are not sufficient to pay all the creditors of any one class, the creditors of such class shall be paid ratably; but a personal representative who, after 12 months from his qualification, pays a debt or demand of his decedent is not personally liable for any debt or demand against the decedent of an equal or superior class, whether it is of record or not, unless he had notice of such debt or demand before making such payment.

Code 1950, § 64-148; 1968, c. 656, § 64.1-158; 2012, c. 614.

The provisions of §§ 64.2-528 and 64.2-529 shall not affect any lien acquired during the lifetime of the decedent.

Code 1950, § 64-149; 1968, c. 656, § 64.1-159; 2012, c. 614.

A. For the purposes of this section, "revocable," "settlor," "trustee," and "trust instrument" mean the same as those terms are defined in § 64.2-701.

B. Unless a contrary intent is clearly set out in the will, the trust instrument, or a transfer on death deed, (i) real or personal property that is the subject of a specific devise or bequest in the will or the trust instrument that was revocable immediately before the settlor's death or (ii) real property subject to a transfer on death deed passes, subject to any mortgage, pledge, security interest, or other lien existing at the date of death of the testator or settlor, without the right of exoneration. A general directive in the will or trust instrument to pay debts shall not be evidence of a contrary intent that the mortgage, pledge, security interest, or other lien be exonerated prior to passing to the legatee.

C. The personal representative may give written notice to the creditor holding any debt to which subsection B applies that there is no right of exoneration for such debt pursuant to this section. Such notice shall include a copy of this section. Any such notice shall be sent by certified mail (i) to the address the creditor last provided to the debtor as the address to which notices to the creditor are to be sent; (ii) if the personal representative cannot reasonably determine the address to which notices to the creditor are to be sent, to the address the creditor last provided to the debtor as the address at which payments to the creditor are to be made; or (iii) if the personal representative cannot reasonably determine either the address to which notices to the creditor are to be sent or at which payments to the creditor are to be made, to (a) the address of the creditor's registered agent on file with the Virginia State Corporation Commission or (b) if there is no such registered agent on file, to the creditor's last known address. The creditor holding such debt may file a claim for such debt with the commissioner of accounts pursuant to § 64.2-552 on or before the later of one year after the qualification of the personal representative of the decedent's estate or six months after the personal representative gives such written notice to the creditor. Once the personal representative has given notice to the creditor as provided in this section, unless the creditor files a timely claim against the estate as set forth in this subsection, the liability of a personal representative or his surety for such debt shall not exceed the assets of the decedent remaining in the possession of the personal representative and available for application to the debt pursuant to § 64.2-528 at the time the creditor presents a demand for payment of such debt to the personal representative. Nothing in this section shall affect either the liability of the estate for such debt to the extent of the decedent's assets remaining at the time a claim is filed or the liability of the beneficiaries that receive the decedent's assets to the extent of such receipt.

In the event that any such claim is timely filed with the commissioner of accounts, the personal representative shall give the specific beneficiary receiving such real or personal property written notice, within 90 days after such claim is filed, to obtain from the creditor the release of the estate from such claim. The notice to a beneficiary may be made to the personal representative of a deceased beneficiary whose estate is a beneficiary, an attorney-in-fact for a beneficiary, a guardian or conservator of an incapacitated beneficiary, a committee of a convict or insane beneficiary, or the duly qualified guardian of a minor or, if none exists, a custodial parent of a minor. If the estate has not been released from such claim after the later of 180 days from such notice or one year from qualification, the personal representative may (1) sell the real or personal property that is the subject of a specific devise or bequest and that is also subject to the claim, (2) apply the proceeds of sale to the satisfaction of the claim, and (3) distribute any excess proceeds from such sale of the specific beneficiary of such property. If the proceeds of such sale are insufficient to satisfy the debt in full, the deficiency shall remain a debt of the estate to be satisfied from the other assets of the estate in accordance with applicable law. If such real property is subject to a transfer on death deed and is also subject to the claim, the personal representative may proceed as provided in § 64.2-634 to enforce the liability for such claim against such property.

D. Subsection B shall not apply to any mortgage, pledge, security interest, or other lien existing at the date of death of the testator or settlor against any specifically devised or bequeathed real or personal property, or any real property subject to a transfer on death deed, that was granted by an agent acting within the authority of a durable power of attorney for the testator or settlor while the testator or settlor was incapacitated. For the purposes of this section, (i) no adjudication of the testator's or settlor's incapacity is necessary, (ii) the acts of an agent within the authority of a durable power of attorney are rebuttably presumed to be for an incapacitated testator or settlor, and (iii) an incapacitated testator or settlor is one who is impaired by reason of mental illness, intellectual disability, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause creating a lack of sufficient understanding or capacity to make or communicate responsible decisions. This subsection shall not apply (a) if the mortgage, pledge, security interest, or other lien granted by the agent on the specific property is thereafter ratified by the testator or settlor while he is not incapacitated or (b) if the durable power of attorney was limited to one or more specific purposes and was not general in nature.

E. Subsection B shall not apply to any mortgage, pledge, security interest, or other lien existing at the date of the death of the testator or settlor against any specific devise or bequest of any real or personal property, or any real property subject to a transfer on death deed, that was granted by a conservator, guardian, or committee of the testator or settlor. This subsection shall not apply if, after the mortgage, pledge, security interest, or other lien granted by the conservator, guardian, or committee, there is an adjudication that the testator's or settlor's disability has ceased and the testator or settlor survives that adjudication by at least one year.

F. Nothing in this section shall affect the priority of a secured debt with respect to the collateral securing such debt.

2007, c. 341, § 64.1-157.1; 2012, cc. 476, 507, 614; 2013, c. 390; 2017, cc. 34, 139; 2024, c. 576.