by Bill Miller | Jun 24, 2018 | Estate Planning, Probate
For many people, probate is not the best solution for settling an estate. Probate proceedings can be long, expensive, and frustrating for the heirs and the executor. Fortunately, there are perfectly legal ways to avoid probate.
Probate Explained
After someone dies, their property – their stuff – has to go somewhere. So, if the person who died left a valid Will, someone submits the Will to the court to be probated. An executor appointed by the court begins the sometimes tedious process of gathering the decedent’s assets and claims against the estate. Claims are paid, property is distributed to heirs, and the executor closes the probate when everything is done.
When there is no Will, the property is still distributed. However, the law determines who gets what, not the decedent.
It is usually best for the heirs when the decedent’s property does not pass to them through probate. We’re going to look at three ways to make this happen.
Joint Tenancy
With this type of property ownership, two or more people own the property. Each owner has an undivided, equal interest in the property. In joint tenancy, a deceased owner’s interest does not pass to the other joint tenants.
Sometimes a property is owned by joint tenancy with right of survivorship. This means that if one owner dies, the other owner gains possession of their ownership interest. In Alabama, this joint tenancy with the right of survivorship does not occur automatically. Instead, the right of survivorship must be clearly stated in a legal document.
Property that passes through right of survivorship usually does not become part of the probate estate. Without the right of survivorship, it does.
Beneficiary Designations
With most financial accounts and certain other assets, the owner may designate who will receive the asset upon the owner’s death. You’ve probably seen beneficiary designations on retirement accounts, bank accounts, and insurance policies.
One thing to remember is that beneficiary designations trump the Will. Usually, property that is passed through beneficiary designations will not pass through probate. Instead, it is transferred quickly to the beneficiaries named by the deceased owner.
Although the speedy transfer is great, discuss these designations with your estate planning attorney. Unless your estate plan and the designations are in sync, your heirs could receive more or less than you intended. For example, if your Will states that your three children will inherit equal shares of your estate, but you name your oldest child as beneficiary on your insurance policy, the oldest child will likely receive more than the other two children.
Revocable Living Trust
Trusts are useful estate planning tools. There are various trusts for various purposes, including the revocable living trust.
Revocable means the trust can be changed fairly easily by the settlor, the person who established the trust. After signing the trust document, the settlor transfers assets to the trust. This type of trust can be used to avoid probate, reduce estate taxes, or manage assets. In general, trusts avoid probate because the trust assets never become part of the settlor’s estate.
A Little Planning Is What’s Needed.
For most people, it’s not that difficult to avoid probate. It just takes some astute estate planning with the assistance of an attorney who knows Alabama law.
The attorneys at Adams & Miller have the experience you need to get the estate plan you deserve. Contact Adams & Miller, P.C. at 256-251-2137 to schedule an appointment or fill out our convenient Contact Form. We help clients in Anniston, Talladega, Birmingham, Gadsden and surrounding communities.
by Bill Miller | Jun 22, 2018 | Estate Planning, Probate
Sometimes people die without leaving a valid Will. This is referred to as being “intestate.” In fact, only about 40% of Americans have bothered to write the most important document they’ll ever write – their Last Will and Testament. However, just about every adult has estate assets that need to pass to their heirs. Even though there’s no legal document to guide the transfer of those estate assets, Alabama law provides a way to settle an intestate estate.
Not All Assets Are Probate Assets.
Some assets pass to named beneficiaries or surviving co-owners, even if no Will exists:
- Anything you own as a joint tenancy or tenancy by the entirety.
- Property transferred to a living trust;
- Proceeds from life insurance policies payable to named beneficiaries;
- Funds in an IRA, 401(k), or other retirement account;
- Securities in a transfer-on-death account; and
- Payable-on-death bank accounts.
Distributing Assets When There’s No Will.
Alabama law provides for the succession of other assets, taking into consideration the marital status of the decedent and whether there are any descendants. By the way, any part of a person’s probate estate that is not addressed by his Will transfers to heirs pursuant to intestate laws.
Succession in a complicated family will be, well, complicated.
| If decedent is survived by: |
Then probate assets pass: |
| a spouse, but no children |
entirely to spouse |
| a spouse, no children, parent or parents |
first $100,000 to spouse, then one-half of the rest |
| a spouse, children of decedent and spouse |
first $50,000 to spouse, plus one-half of the balance |
| a spouse, children of decedent but not surviving spouse |
one-half of the estate to the spouse |
| children of decedent |
in an amount based on degree of kinship to decedent |
| parents, but no spouse or children |
equally to the parents |
| no spouse, children, or parents |
to other children of parents (siblings) |
| no spouse, children, parents, or siblings |
to grandparents or children of grandparents based on degree of kinship. |
If there are no obvious heirs, the estate administrator will conduct an investigation. In cases where they are unable to find any heirs, the probate estate passes to the state.
Probate Without a Will
When there’s no Will, probate is much more difficult and more expensive.
A probate court will appoint a personal representative. This person performs the same duties as an executor, but without the guidance of a Will. At the conclusion of probate, the executor distributes estate assets to the appropriate heirs.
Sounds easy, dying without a Will can set up family feuds that last for generations. Potential heirs may disagree on everything from who should be the administrator to who is actually an heir.
Don’t Wait to Prepare Your Will.
The best solution for your family is to leave a valid Will. Avoid letting a court determine who gets your stuff. Make a Will and keep it up to date.
Schedule a free consultation with the attorneys at Adams & Miller, P.C. Our attorneys know how to help people like you. Just give us a call at 256-251-2137 or use our Contact Form to set up an appointment. Serving clients in the greater Anniston area, including Birmingham, Talladega, and Gadsden.
by Bill Miller | Jun 4, 2018 | Probate
Emma would like to see her Grandmother Ruth’s estate settled quickly in keeping with her grandmother’s wishes. However, probate is a mystery to her – she has never been involved in an estate before. Emma and her family first have to find out who can probate Ruth’s estate.
In General
Probate is the administration of a deceased person’s estate. Administration includes figuring out where their stuff should go and paying any valid claims against the estate. An executor, personal representative, or administrator handles the probate of an estate.
Any of the following people may probate the estate if qualified:
- The personal representative or executor named in the Will,
- Anyone who will receive property through the Will,
- Any person who has a financial interest in the estate, or
- The person who actually has possession of the Will.
The court holds a hearing to determine who is qualified to be the executor or administrator. For example, the person who serves:
- Must be at least 19 years of age.
- Cannot have been convicted of an ‘infamous’ crime.
- Must be competent to serve as executor.
For Ruth’s estate, Emma would like to be in charge. She is 28 years of age, has not been convicted of any crime, and is a competent person. Emma may be qualified to serve as personal representative.
When There Is a Will
Typically, the person who signed the Will (the testator) named an executor and a successor executor. The executor named in the Will is the first choice to serve as executor of the estate. However, if that person is unable or unwilling to serve, the successor executor is usually appointed executor of the estate.
Unfortunately, Ruth did not leave a valid Alabama Will. She had handwritten a Will, but was alone when she signed it. Alabama does not recognize holographic Wills unless the signing is witnessed and attested to by at least two people. In the eyes of the court, Ruth died without a Will (intestate).
When There Is No Will
An estate must be probated even when an individual does not leave a Will spelling out their wishes. After all, their stuff still needs to go somewhere.
Anyone with a financial interest in the estate can ask to be appointed administrator. However, they must do so within 40 days of the testator’s death.
Courts typically name an administrator in the following order of importance:
- Surviving spouse
- Other relatives, like parents, children, or siblings.
- If no living relatives are qualified to serve, the estate’s largest creditor may serve.
- If no Alabama creditors are available, then appointment varies depending on the size of the county in which the decedent lived. Counties with population over 400,000 probate the estate. In smaller counties, though, any willing, qualified person may be appointed administrator.
One important qualification applies when the decedent died intestate: the administrator must be a resident of the state of Alabama.
Ruth died intestate, because her Will was not valid under Alabama law. She was not survived by a spouse or children. Emma and her siblings were the only people eligible to serve as administrator. However, Emma was the only Alabama resident. Chances are good that Emma will be appointed administrator of her grandmother’s estate.
Do You Have Questions About Probate and Estate Administration?
The attorneys at Miller Estate and Elder Law. assist their clients with probate and estate planning. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Alabama, but also help clients in Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.
You might also be interested in:
When There’s No Will: Alabama Intestacy Law
How to Help Your Adult Children with Their Estate Planning
by Bill Miller | May 17, 2018 | Estate Planning, Probate
Probate or avoid probate – one of the main issues you must decide when creating your estate plan. For many people, probate is not the best solution for settling an estate. Probate proceedings can be long, expensive, and frustrating for the heirs and the executor. Fortunately, there are perfectly legal ways to avoid probate.
Probate Explained
After someone dies, their property – their stuff – has to go somewhere. So, if the person who died left a valid Will, someone submits the Will to the court to be probated. An executor appointed by the court begins the sometimes tedious process of gathering the decedent’s assets and claims against the estate. The executor pays claims and distributes property is to heirs. Additionally, the executor closes the probate estate when everything is done.
When there is no Will, the property is still distributed. However, the law determines who gets what, not the decedent.
It is usually best for the heirs when the decedent’s property does not pass to them through probate. We’re going to look at three ways to make this happen.
Joint Tenancy to Avoid Probate
With this type of property ownership, two or more people own the property. Each owner has an undivided, equal interest in the property. In joint tenancy, a deceased owner’s interest does not pass to the other joint tenants.
Sometimes people own property with a joint tenancy with right of survivorship. This means that if one owner dies, the other owner gains possession of their ownership interest. In Alabama, this joint tenancy with the right of survivorship does not occur automatically. Instead, legal document must clearly state the right of survivorship.
Property that passes through right of survivorship usually does not become part of the probate estate. Without the right of survivorship, it does.
Beneficiary Designations to Avoid Probate
With most financial accounts and certain other assets, the owner may designate who will receive the asset upon the owner’s death. You’ve probably seen beneficiary designations on retirement accounts, bank accounts, and insurance policies.
One thing to remember is that beneficiary designations trump the Will. Usually, property passed through beneficiary designations will not pass through probate. Instead, it is transferred quickly to the beneficiaries named by the deceased owner.
Although the speedy transfer is great, discuss these designations with your estate planning attorney. Unless your estate plan and the designations are in sync, your heirs could receive more or less than you intended. For example, if your Will states that your three children will inherit equal shares of your estate, but you name your oldest child as beneficiary on your insurance policy, the oldest child will likely receive more than the other two children.
Revocable Living Trusts to Avoid Probate
Trusts are useful estate planning tools. There are various trusts for various purposes, including the revocable living trust.
Revocable means the settlor, the person who established the trust, can change the trust fairly easily. After signing the trust document, the settlor transfers assets to the trust. People often use this type of trust to avoid probate, reduce estate taxes, or manage assets. In general, trusts avoid probate because the trust assets never become part of the settlor’s estate.
A Little Planning Is What’s Needed.
For most people, it’s not that difficult to avoid probate. It just takes some astute estate planning with the assistance of an attorney who knows Alabama law.
The attorneys at Miller Estate and Elder Law have the experience you need to get the estate plan you deserve. Contact Miller Estate and Elder Law at 256-251-2137 to schedule an appointment or fill out our convenient Contact Form. We help clients in Anniston, Talladega, Birmingham, Gadsden and surrounding communities.
To learn more:
Pros and Cons of TODs and PODs
