Common Misconceptions about the Probate Process in Alabama

For years, probate has caught a bad rap and for the most part, it has been ill-deserved. The aim of this article is to present honest and straightforward information about the probate process in Alabama. This article will assist you in making an informed and conscientious decision regarding your estate plan. Do not hesitate to reach out to us with any comments or questions concerning this blog post. You can always call or leave an e-mail. Sometimes you will get a quicker response if you send us a test message.

1. Probate should be avoided at all costs because it is so expensive. A Trust is a much better option.

Although probate does cost money, to say it should be avoided because is costs money is misleading. For some estates, it is more cost efficient in invest in trusts. Effective trusts are not cheap, either. Trusts require initial setup fees that usually start in the thousands. Trusts also require the Trustee(s) to submit annual reports to beneficiaries. The Trustee’s role is that of a fiduciary, so the Trustee is legally required to act in the best interest of the trust. Usually this amounts to investing the assets wisely, avoiding conflicts and only taking action for the sole benefit of the trust. Normally, Trustees will charge annual fees for discharging their duties as Trustee – as a result, Trusts can easily cost tens of thousands of dollars throughout the life of the Trust.

For some estates (usually larger ones with millions in assets), spending tens of thousands of dollars throughout the life of the trust is worth its weight in gold. For more information about “Trusts” and whether one might be right for you, check our other blog posts.

How much does an attorney charge for probate in Alabama?

It is not uncommon to be charged a minimum of $2,500.00 for a probate administration. For estates that are contested or require beyond routine litigation, this amount is usually higher. Prior to beginning your case, your attorney should be able to clearly communicate how your case will be billed and under what circumstances your final bill could be affected. A good attorney maintains transparency with his clients and will provide continuous updates involving progress in the case.

2. Probate subjects the estate to creditor claims. Avoiding Probate provides a loophole to dodge creditor claims

Wrong. However, probate does shorten the time period to six (6) months for which creditors must file claims against the deceased. When a person dies with creditors, many avenues exist beyond probate court for creditors to pursue their respective claims. Because of this, probate can be advantageous since it provides a shortened and consolidated process to defend against creditor claims.

Example: Person “A” dies with ten (10) creditor claims. The claims are made up of all different types of debt including credit card bills, tax liens, funeral expenses, various secured and unsecured loans, etc. The Alabama Probate code deems some types of claims to have preference over others. This means that the “preferred” debts must be paid in full before the lesser debts are paid out. This Order of Preference, found in Alabama Code 43-2-371, provides as follows:

Order of preference

The debts against the estates of decedents are to be paid in the following order:

  1. The funeral expenses.
  2. The fees and charges of administration.
  3. Expenses of the last sickness.
  4. Taxes assessed on the estate of the decedent previous to his death.
  5. Debts due to employees, as such, for services rendered the year of the death of the decedent.
  6. The other debts of the decedent.

When a person dies in Alabama, the law allows several years for his creditors to file claims against him. However, when a probate estate is opened, this period is shortened to 6 months. In the event any of these claims are meritorious, the creditors holding these claims must wait in line to be paid from the estate and in some events, the creditors may be unable to recover anything from the estate.

This is because probate safeguards the decedent’s estate against some types of claims that are otherwise recoverable outside of Probate court.

3. Having a Will allows a person’s estate to bypass Probate

Actually, the opposite is true. A will is NOT legally binding until it becomes admitted to Probate. Without the probate process, a Will is merely a piece of paper asking the decedent’s heirs or beneficiaries to collectively honor what he has written down.

Probate is the only way to validate a person’s Will. Once validated, each beneficiary has protection from the probate court to ensure he or she is entitled to what has been left to them in the will.

When and where is a Will filed?

A will must be filed in the Probate Court of the county in which the decedent resided. Usually (but not always) this is where the decedent “called home” for at least six (6) months preceding his or her death. A will must be filed no earlier than five (5) days after the decedent’s death.

For example, if a person died while they were a resident of Baldwin County, their Will would be filed with the Baldwin County Judge of Probate. If a person died while they were a resident of Mobile County, their Will would be filed with the Mobile County Judge of Probate.

Believe it or not, jurisdictional issues can sometimes arise regarding which county or state the individual inhabited at the time of their death. Especially in situations involving an extended vacation or a long term nursing home residency, the issue of which state or county having jurisdiction over the probate estate is fairly common.

4. The Executor can override what is in the Will

Generally speaking, this is false. However, the Executor does have limited discretion to do certain things that may or may not be included in the Will. One example of this could be selling assets for “division” or “to pay debts.” If an estate has little cash on hand but has been ordered to pay certain claims or debts, the Executor can liquidate some of the estate assets for cash for the sole purpose of paying off the debts. Depending on the type of property that the Executor intends to liquidate, formal notice must be given to the beneficiaries with the opportunity for them to object to the sale. Upon objection, the court is required to conduct a hearing in which the Executor has the burden of proving that the intended sale is in the best interest of the estate.

5. The estate must be administered only by a family member of the decedent

Fortunately, this is completely false. In fact, a decedent can nominate any competent adult to administer their estate, regardless of familial ties. In fact, many people choose to nominate a neutral, unrelated third party to administer their estate in order to eliminate any potential bias of that of a family member. However, it is perfectly acceptable for a family member who is also a beneficiary to serve as the executor/administrator.

What benefit might there be when a family member also serves as the Executor?

  • Preservation of Estate Assets (keeping money in the family).
  • Promotion of trust amongst beneficiaries.
  • Reducing the chance of having an “out of touch” executor.

What situations might call for nominating a third party, neutral executor?

  • The Testator simply feels more comfortable with a detached, third-party executor.
  • The Testator has reason not to trust any family members to act in the best interest of his estate.
  • The only family members that the Testator would otherwise wish to nominate have previously expressed their unwillingness to serve as Executor.
  • Any potential family members reside outside of the state. This can make it difficult to adequately serve as an executor if extensive travel is required.

Contact us today for an Estate Planning Attorney in Alabama

Brennan R. Clifton, Attorney at Law, has been helping people like you plan their financial futures for the better part of the last decade. Our goal is to provide you with comprehensive, exceptional and honest estate planning services. We appreciate you entrusting us in an area of your life that can seem daunting and we strive to make you “glad” that you chose to work with us.

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