Virginia Estate Tax Filing Requirements for Executors

If you've been named as the executor of a loved one's estate in Virginia, you're carrying a serious responsibility. Estate tax filing isn't optional missing deadlines or submitting incorrect forms can expose you to personal liability. Understanding the filing requirements early protects both you and the beneficiaries counting on you to handle things correctly.

What does Virginia estate tax filing actually mean for an executor?

An executor (also called a personal representative in Virginia) is the person legally responsible for settling a deceased person's estate. Part of that job includes addressing any estate tax obligations. At the federal level, estates that exceed the current exemption threshold must file IRS Form 706, the United States Estate Tax Return. Virginia itself does not currently impose a separate state estate tax the state's estate tax was eliminated for deaths occurring on or after July 1, 2007 but executors in Virginia still need to understand federal filing rules and Virginia-specific estate administration duties.

The exemption amount is indexed for inflation. For 2024, the federal estate tax exemption is $13.61 million per individual. If the gross estate's value falls below that figure, no federal estate tax return is required in most cases. But even when no tax is owed, filing may still be necessary under certain circumstances for example, to elect portability of a deceased spouse's unused exemption.

Who is required to file an estate tax return in Virginia?

You must file a federal estate tax return if the gross estate exceeds the applicable exemption amount. The gross estate includes everything the decedent owned or had an interest in at the time of death:

Real estate in Virginia and elsewhere
Bank accounts, investments, and retirement accounts
Life insurance proceeds payable to the estate
Business interests and partnership shares
Personal property vehicles, jewelry, collectibles
Assets placed in certain trusts

Many executors assume that if no tax is owed, no filing is needed. That's not always true. If the estate is close to the threshold or if the surviving spouse wants to claim portability, filing Form 706 is the only way to preserve those benefits. The filing deadline and forms needed for estate tax returns are strict, so timing matters.

When is the estate tax return due?

Federal estate tax returns are due nine months after the date of death. A six-month extension is available by filing IRS Form 4768 before the original due date, but this only extends the time to file not the time to pay any tax owed. Interest accrues on unpaid tax from the original due date, even if an extension is granted.

Virginia's probate process runs on its own timeline. The executor must qualify before the appropriate circuit court and then follow state-specific procedures for inventory, accounting, and distribution. Getting the estate tax return filed on time is one piece of a larger administrative process.

What forms does an executor need to file?

The forms you'll need depend on the size of the estate and its specific circumstances:

IRS Form 706 Required for taxable estates exceeding the federal exemption
IRS Form 706-NA For non-resident aliens who owned U.S.-based assets
IRS Form 709 If the decedent made taxable gifts during their lifetime that need to be reconciled
IRS Form 1310 To claim a refund on behalf of a deceased taxpayer
Virginia probate filings Including the will, inventory, and accounting documents filed with the circuit court

If the estate qualifies as a small estate, Virginia law provides simpler alternatives. You can read more about the small estate affidavit process for estates that meet the state's threshold.

What documents should an executor gather before filing?

Before you can file anything, you need a thorough inventory of the estate. Missing documents slow down the process and can cause errors on the return. Executors should collect:

The original will and any amendments or codicils
Death certificates order at least 10 certified copies
Prior gift tax returns (Form 709) filed by the decedent
Property deeds and vehicle titles
Financial statements bank, brokerage, and retirement accounts
Life insurance policies and beneficiary designations
Trust documents, if applicable
Business valuation reports for closely held companies
Outstanding debts mortgages, credit cards, medical bills
Prior income tax returns (at least three years)

Having these documents organized before you start the return prevents delays and reduces the chance of overlooking taxable assets. For a detailed list, see our guide on the documents needed to settle an estate in Virginia.

How are estate assets valued for tax purposes?

All estate assets must be valued as of the date of death. The IRS accepts several valuation methods depending on the asset type:

Real estate: Fair market value, typically supported by a professional appraisal
Publicly traded securities: Average of the high and low prices on the date of death
Closely held business interests: May require a formal business valuation, often with applicable discounts for lack of marketability or minority interest
Retirement accounts: The account balance on the date of death
Personal property: Appraised value the IRS may challenge informal estimates

Executors also have the option to use an alternate valuation date six months after death if doing so reduces both the gross estate value and the estate tax liability. This election is made on the return itself and applies to all assets; you can't pick and choose.

What mistakes do executors commonly make with estate tax filings?

Errors on estate tax returns often come from inexperience, not negligence. Here are the most frequent problems:

Failing to file when no tax is owed. If portability is desired or the estate is close to the threshold, a return must still be filed.
Underreporting assets. Omitting jointly held property, life insurance, or gifts made within three years of death can trigger audits and penalties.
Using incorrect valuations. Guessing at property values or using outdated appraisals leads to problems. Get professional appraisals when needed.
Missing the filing deadline. The nine-month deadline comes faster than most executors expect, especially during a period of grief.
Not electing portability. Surviving spouses can lose hundreds of thousands in unused exemption simply because the executor didn't file a timely return.
Mixing personal and estate funds. Keep estate finances completely separate from the executor's personal accounts.

Does the executor need professional help to file?

Not every estate requires a tax attorney or CPA, but many do. You should seriously consider professional assistance if:

The gross estate approaches or exceeds the federal exemption
There are complex assets business interests, multiple real properties, or trusts
The decedent made significant lifetime gifts
There are disputes among beneficiaries
You're unfamiliar with tax law and fiduciary responsibilities

A qualified estate attorney or tax professional can file the return, advise on deductions (like the marital or charitable deduction), and protect the executor from personal liability. The cost of professional help often pays for itself in tax savings and avoided penalties.

What happens after the estate tax return is filed?

Once the IRS receives the return, they may take several months to review it. If the return is accepted, the IRS issues a closing letter confirming no additional tax is due. This process typically takes six to nine months but can take longer for complex estates.

In the meantime, the executor should continue the Virginia probate process filing the inventory, paying debts, filing final income tax returns, and distributing assets to beneficiaries. The step-by-step estate administration paperwork guide walks through this process in order.

Executors should not make final distributions to beneficiaries until they're confident all tax obligations have been met. Distributing assets prematurely can leave the executor personally responsible for unpaid taxes.

Executor's filing checklist

Determine if the gross estate exceeds the federal exemption ($13.61 million in 2024)
Collect all asset documentation deeds, account statements, appraisals
Review the decedent's prior gift tax returns
Decide whether to elect portability of the deceased spouse's unused exemption
Select the valuation date date of death or alternate date
File IRS Form 706 within nine months of death (or request an extension)
Qualify as executor before the Virginia circuit court
File the will for probate and complete the required Virginia filings
Keep estate funds in a separate account
Consult a tax professional if the estate is complex

One practical tip: Start gathering documents and communicating with financial institutions within the first two weeks. Most banks and brokerages have specific procedures for releasing information to executors, and those requests often take longer than expected. The sooner you begin, the more breathing room you'll have before that nine-month deadline arrives.