One question I often get is: Do you have to go through the Probate Court when a loved one dies? The short answer is no, not always. There are times when going through the Probate process is required. The process of going through Probate is referred to as “opening an estate.”
In Alabama, there is a piece of legislation called the Alabama Small Estates Act. This law created a process called Summary Distribution. Summary distribution provides a means to distribute the assets of a small estate without going through the full Probate process of opening an estate.
In order to qualify for Summary Distribution, an estate must not be worth more than $25,000 adjusted annually for the Consumer Price Index. For 2019, that amount was $29,710. Therefore, an estate must be valued at less than or equal to $29,710. Additionally, the deceased person must not own any “real property.” Real property is considered to be land and buildings on land. If the estate is worth more than $29,710 in 2019 or the deceased person owned any land, you must go through the Probate process and open an estate.
Another instance in which you don’t have to go through Probate is when the deceased person has jointly owned property. Jointly owned property would include bank accounts with a significant other or child as co-owner of the account. Another jointly owned item could be a piece of real property that is held jointly with the right of survivorship. Joint tenancy with the right of survivorship means the deceased co-owned the property with another person and upon the deceased’s death, the property is solely owned by the surviving owner.
Finally, one of the ways you can avoid Probate is to create a Living Trust. A living trust is created during the deceased’s life. You will need to have a local family law attorney create a Living Will for you, since it can be quite technical and difficult to prepare. During their lifetime, the deceased transfers his or her property into a Living Trust. It is important to note that retirement accounts and life insurance accounts (which specify a beneficiary other than the estate) are also not required to pass through the Probate process.