There’s a little-known but powerful law that can have serious consequences for the surviving heirs of any deceased person. Virginia Code § 64.2-536 exposes the family of a deceased person to personal liability for the decedent’s debts, even if no probate estate is ever opened. This can even happen when the decedent dies intestate (without a will) or when property passes directly to heirs outside of probate.
Unfortunately for certain individual or familiar heirs of certain estates, the statute was designed to protect creditors. As long as someone has real property, a creditor can always be made whole, even if the deceased didn’t make a will or tried to keep the family farm safe. In theory, this makes good sense – the Commonwealth does not want its citizens borrowing vast sums of money before death, dying, and leaving the surviving institutions, businesses, or people out of luck.
However, a problem arises from how real property immediately “vests” in their heirs at law in Virginia. This legal operation, commonly stated as “real estate drops like a rock through the estate,” means that heirs gain title to real estate at the exact moment of death when there is no will or if the will is silent as to real estate.
A creditor can seek repayment should an estate exist. In many cases, though, surviving family members fail to go through the probate process – especially if the estate is small. However, the absence of a probate estate does not mitigate the impact of § 64.2-536, which permits a creditor to sue heirs and devisees directly. Accordingly, one could be found personally liable to owe someone or some business money despite never entering a contract with them – or even knowing about it – just because a relative in another state died.
Consider this scenario: An unmarried man retires and buys a home on the coast. One day, he goes to the hospital for surgery and unfortunately dies. He has no children or spouse, so his heir at law is his sister’s 23-year-old grandchild living two states away. The man had a will, but it doesn’t mention his new beach home. § 64.2-536 permits that the hospital, being a creditor for the services rendered, can sue the 23-year-old for the full amount owed because that young man is now the owner of the beach house. If he does not respond or loses the case, the Court will enter a judgment against him personally – and with interest. He may not learn about it for many years, making the sum owed more than the value of the property.
Key Dangers for Heirs
- Immediate Vesting of Real Property: Heirs may legally own the real estate the moment the decedent dies—even before any court proceeding. This can sound like a benefit, but it means heirs also inherit any associated legal risks, including:
- Existing liens
- Unpaid property taxes
- Outstanding debts of the deceased
- Personal Liability for Debts: If you take possession of inherited real estate and no probate estate is opened, you could be personally sued for the decedent’s debts up to the value of what you received—even years later.
- No Court Oversight Means No Protection: When a personal representative is appointed, they have formal duties and protections. Without probate, heirs act at their own risk. If mistakes are made—like selling property before debts are paid—creditors can pursue heirs directly.
- Heirs Can’t Always “Disclaim” Their Liability: Some heirs assume they can simply walk away, but disclaiming your interest may not protect you from liability under § 64.2-536. An heir may be obligated to clean out and sell a house just to pay back a company they have never used or contacted.
What Should Heirs Do?
- Open a Probate Estate When in Doubt: If your loved one died intestate and owned real estate or significant debts, it’s often wise to open a probate estate, even if not legally required. This gives creditors a fixed deadline to file claims and creates a process to handle debts properly.
- Consult with a Probate Attorney Early: A brief consultation can prevent serious liability. A knowledgeable elder law attorney can advise you on:
- Whether probate is necessary
- How to limit your liability
- Whether disclaiming your inheritance is an option
- When creditor notices must be given
- Don’t Transfer or Sell Property Too Quickly: Selling or renting out property before debts are resolved could put you directly in the crosshairs of creditors. Instead, make sure all liabilities are known and accounted for.
Conclusion
Virginia Code § 64.2-536 is a legal trap for the unwary. It may seem like a blessing to inherit real estate or assets without court involvement—but when creditors come knocking, the lack of probate oversight can turn a gift into a costly burden.
If you or someone you know is facing an inheritance in Virginia, take the time to understand the law—and don’t go it alone. A small investment in legal guidance now can prevent a large liability later.
