If you’re a resident of Alabama, then you know that the probate process can be expensive and time-consuming. There are many things you can do to avoid unnecessary costs and make it easier for yourself and your loved ones. Let’s discuss some tips and tricks for avoiding unnecessary probate costs in Alabama.
Probate process in Alabama
Probate & estate administration is the legal process of transferring a deceased person’s assets to their beneficiaries. The probate court appoints a personal representative to oversee the estate and carry out the deceased’s wishes. The probate process can be expensive in Alabama because your estate will pay court fees, attorney’s fees, and other administrative costs.
How to avoid unnecessary probate costs
- Keep an updated will and trust: It’s essential to have both a will and trust when estate planning. Your will spells out your wishes for your loved ones after you pass, while a trust governs how they get their inheritance. Most people use trusts for large assets like real estate, businesses, and other benefits and a will for smaller items like watches, jewelry, and collections.
- Give gifts during your lifetime: You can give up to $16,000 per year per person without incurring any gift taxes in Alabama. If you gift more than that, you may suffer tax consequences. And remember, you can only do this while still alive; you cannot promise a gift that’ll be given after you die.
- Set up transfer on death accounts: This account allows you to name a beneficiary who will receive what’s remaining in there after you die. They include bank accounts, retirement accounts, brokerage accounts, and some insurance policies.
There is no denying that probate is one of the best legal procedures the state uses to ensure your beneficiaries get what they deserve. But, there is no need to let them go through this process as it can take up to five years or more for it to be complete.