Foley Alabama Attorneys
(205) 990-7000

Gulf Coast 251.948.2168

Estate Planning FAQs

Do I need an estate plan? +

All property, real or personal, owned by a person at the time of death comprises his or her estate. Regardless of the dollar value of the estate, it is essential to have a well-drafted estate plan. Creating an estate plan could be as simple as preparing a will, powers of attorney, and living will or be more complex to include a variety of trusts agreements and family partnership agreements.

What are the benefits of creating an estate plan? +

Having an all-embracing estate plan can prove to be very beneficial. An estate plan drafted by a competent estate planning attorney can: (i) coordinate what would happen with your home, investments, business, life insurance, and employee benefits, in the event you die or become disabled, (ii) ease the transfer of assets to your heirs, (iii) avoid unnecessary depletion of the estate by taxation, (iv) exempt the personal representative of the estate from requirements such as purchasing a bond and filing inventory, accounting or settlement during probate, (v) ensure that your assets are distributed in accordance with your personal wishes, (vi) provide instruction and guidance to your family and friends, (vii) prevent disputes between your loved ones and thereby avoid litigation costs, (viii) provide for succession considerations for businesses, (ix) make certain that minors and those with special needs are protected financially and otherwise, and (x) provide estate tax benefits.

What does a simple estate plan include? +

A simple estate plan consists of a will, durable power of attorney for health care, durable power of attorney for property and a living will.

Wills FAQs

What is a will? +

A will is a legal document that allows a person to provide for the distribution of his or her assets after death. A will is often referred to as a “Last Will and Testament”.

Who may make a will in Alabama? +

Any person 18 or more years of age who is of sound mind may make a will.

What makes a will legal in Alabama? +

In order for a will to be valid, it needs to be in writing, signed by the person who is making the will (also referred to as a testator), in the presence of and signed by at least two witnesses who have witnessed the signing of the will by the testator. Alabama law also permits wills to be held valid where the testator himself/herself is unable to actually sign the will. In those circumstances, a written will is signed in the testator’s name by some other person in the presence of the testator and at the direction of the testator. The requirement pertaining to at least 2 witnesses remains the same.

Is a will invalid if a beneficiary acts as a witness to the will? +

While it is preferred to have witnesses that do not have any beneficial interest in the will, a will is not invalid simply because the will was signed by a witness who was also a beneficiary under the will.

How are your assets distributed in the absence of a will? +

In the absence of a will, the property of a deceased person is distributed by a person appointed by the Probate Court, an administrator, in accordance with a mathematical formula set by law. This formula does not consider your sentiments, wishes or desire with respect to your assets. Such distribution of assets may also cause emotional distress among your family members and could lead to additional expenses when they turn to the court to fight over the distribution of your assets.

Do I need a will if I have minor children? +

Yes. If you have minor children, the absence of a will can be quite detrimental to your children, surviving spouse and other family members. In the absence of a will appointing a guardian, it is the State that decides which person will have custody of your minor children. This could result in your surviving spouse, his or her in-laws and other family members fighting in court over the custody of your children which not only drains the assets of your estate but destroys family relationships.

Do I need a will if I run a small business? +

Yes. If you run a business and you die without leaving a will, an administrator appointed by the Probate Court cannot carry on your business without express approval from such court. The Probate Court has limited authority to provide such approval and in most cases, the business must be sold. A will can provide for succession consideration for businesses.

Does having a will save me money? +

Having a well drafted will can save you a lot of money. For instance, in the absence of a will, the Probate Court appoints an administrator to manage the distribution of the assets of your estate. This administrator charges a fee which will be paid out of your assets. This fee can be avoided by the use of a will. A will allows you to select a person to manage the distribution of assets, and can contain a provision directing that such person shall not be paid any fee or only a small fee. Furthermore, if the court has to appoint an administrator, such administrator will be required by law to purchase a bond. The amount of the bond is determined based on the value of your estate and is paid from the assets of your estate. A carefully drafted will can however provide relief from having to purchase such a bond. Furthermore, a will can also provide for certain assets to pass outside of the estate, reduce the amount of taxes to be paid and provide estate tax benefits.

Can I address Pet Care in my estate plan? +

Yes. Our pets are some of the most beloved members of the family and yet they are so often overlooked in our estate plans. You can plan for your pet’s well being and future care in your will or through a trust. For a more in depth understanding, please review our blog on planning for your pet’s future care here.

Powers of Attorney FAQs

What is a Durable Power of Attorney for Health Care? +

A durable power of attorney for health care appoints a person designated by you to make decisions regarding your health care treatment in the event that you are unable to provide informed consent.

What is a Durable Power of Attorney for Property? +

A durable power of attorney for property appoints a person you choose to act for you and manage financial matters should you become unable or perhaps unavailable to do so.

What is a Living Will? +

A living will, also known as a directive to physicians, or an advance directive, provides doctors and hospitals with your instructions regarding the nature and extent of the care you want should you suffer permanent incapacity.

Trusts FAQs

What is a Living Trust? +

A living trust is a relationship whereby one party (“settlor” or “grantor”) during his or her lifetime transfers real and/or personal property to a second party (“trustee”) for the benefit of a third party (“beneficiary”). This trust relationship is governed by a document titled “trust agreement” or “trust declaration”.

What is a Trust Agreement? +

A trust agreement outlines the identities of the settlor, trustee and beneficiary, and identifies how the trustee is to manage and distribute the property placed in the trust.

What are the benefits of creating a Living Trust? +

Generally, a living trust allows the settlor to also be the trustee and beneficiary of the trust. This arrangement is advantageous as the settlor is not only able to control and manage the trust property but also benefit from any income of the trust property during his or her lifetime. Further, a living trust permits the settlor to identify the people who can benefit from the trust property after the settlor’s death. The beauty of a living trust is that you are able to avoid probate and at the same time control and benefit from your assets. Other advantages of a living trust include providing for (1) minor children and loved ones who are special needs or unable to manage their assets, (2) management of your assets in case of incapacity, (3) an immediate transfer of your assets or the benefit therefrom to your loved ones upon your death, (4) a reduction in estate taxes, and (5) privacy.

What is a commonly used example of a Living Trust? +

A commonly used example includes a living trust which (1) provides for the settlor during the settlor’s lifetime, (2) after the settlor’s death, provides for the benefit of the settlor’s surviving spouse, and (3) upon the death of the surviving spouse, distributes the trust property to their children and/or lineal descendants.

Why is a Living Trust considered a great tool to avoid probate? +

The key to avoiding probate is that at the time of your death, you leave no assets in your name. A living trust allows you to transfer all of your assets to the trust such that it is the trust that owns them and not you. As a result, at the time of your death, you are left with no probate assets and hence there is no need to probate your estate.

Which is better, a Will or a Trust? +

For most people, a Will is a sufficient estate planning instrument. The main advantage of having a Living Trust when compared to a Will is that you can avoid probate. A living trust allows you to transfer all of your assets to the trust such that it is the trust that owns them and not you. As a result, at the time of your death, you are left with no probate assets and hence there is no need to probate your estate. Additionally, your beneficiaries can receive the assets you have left them quickly upon your death.

Do I need a Will if I have a Living Trust? +

Yes, even if you create a Living Trust, you will need to execute a Will. In this instance, your Will is referred to as a Pour Over Will. Such a Will is intended to catch any assets that you may have forgotten to include in your trust, and pour them over into your Living Trust.

Is a Living Trust made Public, like a Will? +

One of the advantages of having a Living Trust is that it affords privacy. A Will is made part of the public record when it is submitted for Probate. Since the assets of a Living Trust bypass probate, the Living Trust instrument does not have to be filed in the Probate Court, and therefore remains private.

Does a Living Trust provide Creditor Protection? +

It is a common misconception that Living Trusts provide asset protection from creditors. A creditor can go after the assets owned by the Living Trust as if those assets owned were owned by you.

When does my Living Trust become Irrevocable? +

During the life of the Settlor/Grantor of the trust, it is considered a revocable trust. However, upon the death of the Settlor/Grantor, the trust becomes irrevocable.

Probate FAQs

What is Probate? +

Probate is a legal process initiated in the Probate Court whereby a deceased person’s assets are distributed pursuant to the terms of their Last Will and Testament, or in the absence of a will, pursuant to Alabama’s intestacy laws.

What is the time limit for Probate of a Will? +

Generally under Alabama law, a Will is not effective unless it is filed for Probate within 5 years of the death of the testator.

In which Probate Court is a Will probated? +

Typically, you would submit a will for probate in a Probate Court located in the county the testator was inhabiting at the time of his/her death.

Who can file for Probate in Alabama? +

If the decedent had a Last Will and Testament, then the person appointed as Personal Representative listed therein files the will for Probate. In the event there is no will, Alabama law provides for an order of priority as to who can file for Probate. Typically, it is the surviving spouse, then the next of kin who is entitled to share in the distribution of the estate, then the largest creditor of the estate residing in the state of Alabama, and then any other person that the Judge of Probate appoints.

What is the Probate process? +

The Probate process begins when a petition is filed with the Probate Court to open an estate of a deceased person. There may be some initial court proceedings involved in proving that the filed will is valid and/or whether the person asking to be appointed as executor of the deceased person’s estate should be appointed as such. Once the Will is submitted into Probate and the Court appoints an executor, said executor assumes the responsibility of managing the estate’s assets. During the administration of the estate, the executor pays the estate’s debts and taxes, resolves any estate disputes, and ultimately transfers the assets of the estate to their intended beneficiaries.

Can the Probate process be contested? +

Yes, typically disputes pertaining to Probate arise due to an heir or beneficiary disputing the validity of the will being offered for probate, or claims against the executor including, breach of fiduciary duty by executor, mishandling of estate funds, and failing to provide an accurate accounting.

How long does the Probate take in Alabama? +

Probate process in Alabama takes at least six months. The laws in Alabama allow creditors six months to file any claims against the estate, and as a result, the estate has to remain open for this time frame. That being said, Probate can take longer than six months in many other situations including disputes among heirs or the estate having to sell real property.

Does all my property have to go through probate? +

Any property that is owned entirely by the deceased person, and any assets that do not pass automatically to designated beneficiaries are subject to Probate. Assets comprising joint survivorship deeds, payable on death beneficiaries on bank and investment accounts, assets owned by living trusts typically are not subject to probate.

Should I plan to avoid Probate? +

Probate is a time consuming and expensive legal proceeding. Depending on the types of assets you have, it may be advantageous to avoid probate. For instance, setting up a living trust, naming payable on death beneficiaries on banking and investment accounts, and employing other estate planning strategies may help your beneficiaries avoid the trouble of going through probate all together.