Probate, by definition, means to establish the validity of a will. In other words, it's a legal process of settling an estate after the testator's passing. It's also an essential part of estate planning in Huntsville, AL.
In the state of Alabama, when an individual passes away, probate court proceeds accordingly with the estate will's appointed executor. If an individual dies intestate—without a will—the probate court will appoint someone to take on the role of executor.
Whatever the case, it's likely that the loved ones you leave behind will have to deal with probate. This can become quite complex, costly, time-consuming, and stressful if they're not prepared or knowledgeable about the official process.
Having said that, we're going to cover the amount of time it actually takes for the probate process to conclude. We'll also cover what to expect during the process, who's responsible for what, and how to prevent the entire event from dragging on.
Keep reading to learn more.
How Long Does It Take to Probate Wills in Alabama?
By law, the probate process for most estates must take at least six months in Alabama. This is the allotted period for creditors and other collectors to claim the estate for any unpaid debts. It also gives the executor of the estate enough time to review any wills and trusts left behind, locate the named beneficiaries, and create a complete inventory of the estate, if required, and carry out any unresolved issues.
Of course, the actual length of time for the probate process to conclude will vary based on several factors. For example, a smaller estate will take less time than a large one—especially if there aren't any wills or trusts to help speed up the process. Or, if someone decided to contest any part of the will, there will be more uncertain delays.
Additionally, suppose complicated claims have been involved that need to be litigated. In that case, probate can take up to a year or several years to finish processing.
Lastly, anything you leave to named beneficiaries in established trusts, living or otherwise, will bypass the probate process. The actual will, however, must be probated.
How Does the Probate Process Work?
The probate process involves several stages from start to finish. Here's a quick overview of each part of the process:
First, the executor of the will or court-appointed associate must contact banks, insurance companies, utility providers, pension companies, and any other institutions collecting payments from or holding assets for the deceased. Regarding asset holders, they'll be asked to provide a valuation of each asset for income tax and inheritance tax purposes.
Next, if the individual has left a will, the executor will need to apply for an admittance of the will to probate. Finally, if there is no will, whoever is in charge of the estate must use for Letters of Administration, which is a different type of probate case. After these applications are accepted to the probate court, a death notice will be advertised.
Now it's time to ensure that the assets will be released promptly. For this to happen, the executor must send an official copy of the grant of Probate or Letter of Administration to the asset holders in addition to a request for the funds to be released. Once these assets are resolved, the executor must pay any debts of the estate before they can move forward. This could include funeral costs, tax bills, credit card balances, loans, care accounts, and other bills.
Once the above debts have been paid, the rest of the estate can be distributed appropriately among the named beneficiaries. However, suppose there are no wills or trusts left behind by the deceased. In that case, the asset distribution will be handled accordingly with the Alabama Intestate Succession laws.
The executor or family will also be expected to set up and keep estate accounts. Estate accounts entail documents confirming how the assets and money were distributed from the estate. Details and records of any debts paid must also be included. Each beneficiary should have a copy of the accounts.
These records need to be adequately maintained. The HMRC can call upon any beneficiary and the executor for proof for up to 20 years after the estate has been settled.
Is There a Specific Time to File for the Probate of an Estate?
Following the Alabama Probate Code, an estate's probate has to be filed within five years after the estate owner's death. Probate can be filed by the named executor, any beneficiaries named in the will, or anyone with a financial interest in the estate.
If probate is not filed within the given period, Alabama law will treat the estate as intestate. In other words, it will be treated as if there were no will (even if one exists), and the distribution of assets will follow the state's succession laws. This, of course, could result in a completely different distribution of assets from what the deceased had intended when planning for their estate.
Do All Estates Have to Go Through Probate?
Technically, not all estates will have to go through a lengthy probate process. There are two instances when complete probate won't be necessary—when the property or assets pass straight to another person in a trust or when the estate falls under the "small estates" rule.
In Alabama, an estate is considered small if it doesn't contain any real property. However, its entire value exceeds $30,000, indexed for inflation. In this case, you would wait 30 days after an individual's passing to follow through with a summary probate procedure.
Additionally, the heirs of the small estate may collect their assets once the estate has been published for at least one week and all remaining expenses have been paid for, or other arrangements have been made.
Common Probate Fees
Probate costs will vary from estate to estate, but the most common fees you can expect to pay to include the following:
Court fees
Filing fees
The Alabama attorney fees
An executor's fee (Alabama is considered a reasonable compensation state)
Other professional fees such as accountant, appraiser, and land surveyor fees
The Executor or Administrator Probate Bond which is required by all county courts
Miscellaneous fees
All of the above fees and general costs revolving around estate probate are expected to come out of its total value before the distributions are made to its beneficiaries.
Are There Ways to Avoid Probate in Alabama?
In most cases in Alabama, some form of a probate process will have to take place to ensure the validity of the deceased's last will and testament and the estate's overall value. In addition, of course, probate is also necessary to ensure that debts are paid accordingly.
However, there are many ways where probate can be almost completely avoided. These instances include the following:
The estate's value is below the small estate threshold (as mentioned above).
There are trusts present along with the will. A living trust or any other kind of trust offers up the immediate surrender of an estate owner's specified assets. That means the assets named in a trust automatically transfer ownership to the named beneficiary, which means they can not be counted towards the estate's value.
Accounts and assets have been made into a Transfer/Payable on Death (TOD; POD). This technically works as living trusts do. However, only the estate owner still has full ownership of their accounts until they pass. Once they pass on, whoever is named on the account immediately becomes the acting owner.
If you have a sizable estate and wish to avoid probate as much as possible, your best bet is to create living trusts and to make your accounts TOD or POD if possible.
Who Should Probate a Will?
Generally speaking, the named executor in the will of an estate is the person who should probate the will. In most cases, the executor is someone the estate owner trusts, such as a family member, close friend, or even a lawyer.
Of course, if there isn't a will or if the will fails to name an executor, the probate court will name an administrator to handle the probate process.
The probate process in Alabama can be lengthy and costly. That's why it's crucial to plan your estate appropriately so that you can save the loved ones you leave behind a lot of time, money, and frustration.
If you aren't sure who to name as the executor of your last will, need help setting up a living trust, or have questions about the probate process, contact us today. Sarah S. Shepard or another experienced Huntsville attorney will gladly walk you through the entire process or stand in as your named executor if necessary.
