The Estate
In Alabama, all estates start in Probate Court. While there is no requirement to use a lawyer, Probate Courts have formal and sometimes complicated procedures and deadlines. Failing to follow the correct procedure or missing a deadline can often result in costly delays and problems.
The death of a family member or friend can sometimes bring out the very worst in families. Experience shows that even in close families there is a tendency to get overly emotional about relatively trivial matters at the time of a loved one’s death. Such minor matters, or any delays or inconveniences can be upsetting, pose issues of fairness, and create conflict among family members. Because of these issues, it is generally a good idea to hire a lawyer to guide the family through the process.
Estate Issues
Estates create duties and responsibilities for the family of the deceased; Wills that need to be probated, estates that need to be administered, governmental agencies that need to be notified. The family may also have to deal with issues such as social security or pension plan benefits, veterans’ benefits, insurance benefits, and income and estate taxes. These issues can be overwhelming to family member that aren’t familiar with the process. This guide is not intended to be a substitute for specific individual tax, legal, or estate settlement advice, as the issues are not the same for every estate. Accordingly, where specific advice is necessary or appropriate, consultation with a competent professional is strongly recommended. Most of all, keep in mind that while it is important to take care of all of these duties and responsibilities, it’s important to make wise decisions and not act in haste while you are going through the grieving process.
Important Documents
Locate as many of the following documents as possible: wills, deeds, bank statements, stock certificates, military discharge papers, insurance policies, bills and titles. It will also be important to know all of the names and addresses of family members.
Death Certificates
Before the business and legal issues of the estate can be pursued, it will be necessary to obtain certified copies of the death certificate. You can order them from the funeral director or directly from the Health Department in your area. It is always better to order a few more than what you think you will need. Most agencies will only accept certified death certificates and not photocopies.
Is there an Estate
The first question that must be answered is: Are there assets that need to pass through an estate. Here are some examples of assets that may not pass through the estate:
● Property that is held by joint survivorship deed. This property automatically belongs to the surviving joint tenant(s).
● Property that was transferred to a trust.
● Proceeds of a life insurance policy for which there is a named beneficiary.
Money in a pension plan, individual retirement account (IRA), 401(k) plan, or joint bank account.
If there are assets that fall outside of these categories, for example, real estate or other assets that are only held in one name, then an estate will need to be opened.
Handling the Estate
There are three different and distinct ways to handle estates in Alabama. The three ways are: probating a will, administering the estate without a will, and summary distributions. To determine the proper way to handle the estate, you must know, first, whether the person had a will, and second, what are the assets of the estate and the approximate value of the Estate.
Probate Court
If there is an estate that needs to be handled, the Probate Court is the court that transfers legal title of property from the estate of the person who has died (the decedent) to their proper heirs.
The term probate refers to a proving of the existence of a valid will or determining and proving who one’s legal heirs are if there is no will. Once the will has been admitted or the heirs identified, probate is the process used to determine who gets the property in the estate.
The probate process can be time consuming and costly. Because probate requires court approval, the process can tie up property for a period of time. Proceedings in Probate Court can also be costly. Estate lawyers may charge a flat fee, percentage, or an hourly rate depending on the issues involved. The costs can be even more if problems or litigation occur. A will is a very personal document, and may reveal private family and financial issues and concerns. But once it is entered into the court record, it becomes public, and can be inspected by anyone.
Who is responsible for handling the Estate ?
In most circumstances, the Executor or Personal Representative named in the will takes this job. If there isn’t a will, or the will fails to name an executor, the Probate Court probate court names someone (the Administrator) to handle the process. Normally that person is the most capable relative who lives in the State.
What does Probating the Will mean?
Probating the Will is a legal process where the named Personal Representative (or executor) goes before a court to have the will proven as valid and to be given the right to administer the estate. If property is left to heirs in a Will, the will must be probated so that the transfer of title to the property becomes public.
To probate the Will, an attorney will draw up a Petition and try to get family members to agree to the process and sign waivers. If the will is contested, or do not cooperate in the process, a court appearance and sometimes litigation will be necessary.
After the will is offered for probate and proven, then the process begins to collect the assets of the estate, deal with claims and creditors, and properly distribute the assets of the estate. The process of distribution does not begin until after the claims period has passed and claims have been satisfied or defeated.
Administering an Estate without a Will
If the deceased person has an estate , but did not have a will, there is a different probate process. An attorney will prepare a Petition asking the court to appoint an Administrator for the Estate. The
petition will identify the heirs and the assets of the Estate. The person named in the Petition will have to acquire a bond in an amount set by the Court Once an Administrator is appointed, then the claims period begins and the estate is administered in accordance with the laws of the State.
When an administration is done without a will, The Administrator has to get permission to do things such as selling the assets of the Estate, or distributing the assets to the heirs.
What is involved in handling an estate?
The Personal Representative or Administrator has many duties including:
● Identifying and cataloging all property owned by the deceased.
● Appraising the property, and paying all debts and taxes, and
● Distributing the property to the heirs as the will or law directs.
How long does estate administration take?
The duration varies with the size and complexity of the estate, the difficulty in locating the heirs who would take under the will or laws of the estate, and the specific duties involved in handling the estate. Delays may occur because of tax filing obligations.
If there is a will contest, or anyone objects to any actions of the executor or estate trustee, the process can take a long time. Some matters have taken decades to resolve, but a year may be closer to the norm.
What is a Summary Distribution?
If the deceased person has an estate, but the estate does not include real property, then the heirs may be able to administer the Estate in a less costly and time consuming manner. If the value of the property does not exceed the amount set by the Statute (the value for 2019 is set at just over
$29,000, but the value is indexed for inflation and goes up every year) and there are no claims against the Estate, then the heirs can file a Summary Distribution.
The lawyer for the heirs would draft a Petition for Summary Distribution identifying the heirs and the assets to be divided. The Probate Court publishes a notice in the newspaper and a hearing is set.
This typically occurs within 60 days. The notice gives anybody who has a claim or an objection to the distribution of the estate, the opportunity to file a formal objection.
On the date of the hearing, if no objections are received, and everything seems in order, the court approves the petition, and enters an order distributing the assets.