What You Need to Know About Avoiding Probate in Alabama
Probate laws refer to the set of laws regarding wills, trusts and estates, guardianships and involuntary commitment proceedings, adoptions, name changes and partition of real estate. This broad field of law helps individuals legally sort and get their affairs in order. The most common legal matters probate attorneys can help with include estate planning and executing a will.
Avoiding the probate process can help grieving families avoid complex and sometimes unnecessary court proceedings. Here is everything you need to know about avoiding probate in Alabama.
What Are Some Ways to Avoid Probate in Alabama?
In Alabama, there are many different ways someone can avoid the probate process. An individual may feel more inclined to avoid probate as probate court can be time consuming and difficult to navigate, especially during a time in which a loved one may have just passed. Avoiding probate allows for loved ones to obtain assets passed down without the hassle of having to go through court.
Related: How to Avoid Probate
Some common ways to avoid probate include the following:
- Creating a living trust
- Joint ownership
- Designating a Payable-on-death to bank accounts
- Following a simplified probate procedure
Creating a Living Trust
One way to avoid the probate process is to open a living trust. A living trust is a legal document where a trustee is given the responsibility for managing another person’s assets. A living trust allows for the easy transfer of assets, while the probate process is much more complex. A living trust eliminates the need for probate because it allows another designated person, rather than the government, to handle and distribute assets.
What is Joint Ownership?
Joint ownership is when two people own assets or property. In the case of joint ownership, the surviving co-owner automatically owns the property when their co-owner passes. Since ownership of the property automatically transfers, there is no need for the probate process. According to Section 35-4-7 of Alabama Code, joint ownership is also known as joint tenancy.
Adding a Payable-on-Death Designation to Your Bank Account
A payable-on-death (POD) designation allows another individual to access one’s bank account. Once a person has passed, the assigned POD can then claim any monetary assets in the bank directly rather than having to go through probate court proceedings. By assigning someone to be your payable-on-death, any assets in the bank can directly transfer to your POD. This circumvents the need for probate court to go through assets and divide up whatever is left in your bank account.
Simplified Probate Procedures
One final way to avoid the probate process is to undergo a simplified version of a probate procedure. The simplified probate procedure only applies to small estate property.
According to Section 43-2-692 of Alabama Code, the simplified probate procedure is applicable in any of the following circumstances:
- The value of the estate or asset is less than $25,000 dollars. This amount is adjusted in the consumer price index.
- The individual who has passed died as a resident of the state
- No petition for the appointment of personal representative has been granted
- At least 30 days have passed since the petition was published