Settling Small Estates (AL)

Summary Distribution Requirements

To qualify for summary distribution, the following conditions must be true:

• The estate has a net probate value <$34,611
  (see Annual Small Estate Limits for years prior to 2023)
• The estate does not include any real property (i.e., real estate)
• At least 30 days have passed since the death
• All estate debts have been paid or payment arrangements have been made
• No petition has already been made to the court to officially appoint a personal representative

In calculating probate estate net value, you should value assets as of the date of death, and subtract any debts. Do not include assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.

See AL Code § 43-2-692 for statute details.

Process

If the estate qualifies for summary distribution, you can simplify the probate process as follows:

1. Petition: Submit to the court a Petition for Summary Distribution, along with a death certificate and the will, if one exists
   (If necessary, update the petition form to show the appropriate estate value limit as indicated above)
2. Notice: Publish a Notice to Creditors in the newspaper (see Finding AL Debts, but note that for summary distribution, the notice need be published only once)
3. Medicaid: Directly notify Medicaid using the Alabama Medicaid Notice Form, or provide notice electronically
4. Court Order: The court will issue an order stating that the estate assets should be distributed as indicated by law
5. Settle: Use the court order to collect the assets and settle the estate (see Settlement Priority below)

Settlement Priority

When settling the estate, you must allocate estate assets in the following priority order:

1. Reasonable funeral expenses
2. Court fees
3. Expenses of the last illness
4. Taxes
5. Secured creditors (e.g., liens)
6. Unsecured creditors (e.g., credit cards)
7. Distributions to heirs

Note that this approach may not be an optimal outcome for a surviving family, who might prefer to go through standard probate in order to take advantage of any AL Family Entitlements.

This approach also does not explicitly provide for AL Executor Compensation, which normally has priority over most estate debts.

If estate solvency is uncertain, an executor should consider going through official probate for the increased creditor protection it offers. Alternately, such uncertainty can sometimes persuade creditors to forgive a portion of debts, since they will want to avoid legal expenses as well, and may prefer to get something rather than nothing.

See also Resolving Debts and Making Distributions.

Vehicles and Boats

If the estate consists only of vehicles, you can obtain title by submitting Next of Kin Affidavits, along with a copy of the death certificate, to the Motor Vehicle Division.

Court