Updated 2011 Value Threshold for Alabama Small Estates

May 26, 2011 By Leave a Comment

I have written about the 2009 amendment to the Alabama Small Estates Act that made it much more useful to Alabama probate attorneys.  Specifically, the Act was amended to raise the dollar threshold from $3,000 to $25,000.  Under the 2009 amendment, estates worth $25,000 can qualify for summary distribution under the Act.

The 2009 amendment also provided that the $25,000 threshold was to be indexed for inflation (tied to the Consumer Price Index).  The Alabama State Finance Director is responsible for making the inflation adjustments and reporting to the probate court.

On April 5, 2011, the State Finance Director notified the probate judges that the adjustments have been computed.  Here they are:

  • For 2009, an estate must be worth $25,000 or less to qualify for summary distribution.
  • For 2010, an estate must be worth $25,410 or less to qualify for summary distribution.
  • For 2011, an estate must be worth $25,791 or less to qualify for summary distribution.

The State Finance Director issued this accompanying statement:

“Because the CPI-U for a calendar year is not published until January of the succeeding year, the adjustment provided will reflect the change for the previous calendar year, but will be effective for twelve months beginning the following March 1. For example, the value of $25,791 established for 2011 will be used for the period March 1, 2011 through February 29th, 2012.”

To sum it up, the Alabama Small Estate procedure could be useful for personal representatives of for decedents dying between March 1, 2001, and February 29, 2012, if:

  1. The decedent owned Alabama assets but did not own real estate;
  2. The total value of the decedent’s assets is less than $25,719; and
  3. There are no outstanding debts of the estate.

For more information, check out my discussion of the Alabama Small Estates Act.

Filed Under: Alabama Probate Tagged With: ,

Note to Alabama Probate Attorneys: File in the Right Court

May 12, 2011 By Leave a Comment

Dubose v. Weaver, No. 1070579 (Ala., February 25, 2011)

The Alabama Supreme Court recently threw out several years worth of complex litigation over a will contest, holding that neither the Alabama probate court nor the Alabama circuit court had jurisdiction over the estate administration.

The case was vacated due to the Alabama probate attorney’s failure to file the case in the right court.

Here’s how it happened: The personal representative, with the attorney’s assistance, filed a petition to admit the will to probate and for grant of letters testamentary in the Washington County Probate Court.  But before the will was admitted to probate, the heirs filed a petition to contest the will and a Petition for Transfer and Removal of the Estate from Probate Court to Circuit Court for Will Contest Proceedings.

The probate court granted the petition to remove to circuit court. Protracted litigation ensued, eventually reaching the Alabama Supreme Court.

Under Alabama law, the probate court is a court of general and original jurisdiction for administration of estates. The circuit court can obtain jurisdiction over a pending administration of an estate only by removing the administration from the probate court to the circuit court pursuant Section 12-11-41 of the Alabama Code, which provides:

“The administration of any estate may be removed from the probate court to the circuit court at any time before a final settlement thereof, by any heir, devisee, legatee, distributee, executor, administrator or administrator with the will annexed of any such estate, without assigning any special equity; and an order of removal must be made by the court, upon the filing of a sworn petition by any such heir, devisee, legatee, distributee, executor, administrator or administrator with the will annexed of any such estate, reciting that the petitioner is such heir, devisee, legatee, distributee, executor, administrator or administrator with the will annexed and that, in the opinion of the petitioner, such estate can be better administered in the circuit court than in the probate court.”

But the circuit court cannot take over jurisdiction of an estate until the Alabama probate process really begins.  In other words, the Alabama estate administration must start in the probate court before it can be removed to the circuit court.  And the Alabama estate administration doesn’t begin in probate court until the judge actually acts on the petition to admit the will to probate and grant letters testamentary.  Simply filing a petition is not enough to start the Alabama probate process and allow removal to the circuit court.

Here’s the takeway for Alabama probate attorneys: File in the right @*&$# court.

Filed Under: Alabama Probate Tagged With: ,

What is Undue Influence?

May 17, 2010 By 3 Comments

Undue influence is a common ground for will contests.  The issue usually arises when someone – usually a caregiver – receives a gift from a person who is arguably weak and dependent upon the recipient.  Someone will then object on the grounds of undue influence, arguing that the recipient had so much control over the giver that the gift would not have occurred without the “undue influence” of the recipient.  It is essentially a claim that a greedy caretaker, family member, or other individual used his or her position of influence to take advantage of a weak-minded individual by causing that individual to make a gift to the caretaker.  Undue influence claims can arise for gifts made during life (inter vivos) and at death (by a will).

While the law of undue influence will differ from state to state, the concept is generally the same.  In the typical undue influence case, the giver and the recipient are in a relationship that gives the recipient the opportunity to wrongfully cause the giver to turn over his or her property.  This is known as a confidential relationship.

A confidential relationship, sometimes known as a fiduciary relationship, is one in which one of the people in the relationship is in a position to influence the other person because of some created dependency. The dependency can arise from physical or mental disability, being in a position of power or authority over the other person, or if one person creates an environment of trust. Any of these scenarios could be characterized as a fiduciary or confidential relationship.

As a practical matter, undue influence cases often turn on the existence of a confidential relationship.  The factors necessary to establish a confidential relationship may vary depending on what state is involved.  In Mississippi, the existence of a confidential relationship depends on the following:

  1. Whether the recipient needs to be taken care of by someone;
  2. Whether a close relationship exists between the two individuals;
  3. Whether the giver has her transportation and medical care needs provided for by the recipient;
  4. Whether the parties maintain joint accounts;
  5. Whether the giver is physically or mentally weak;
  6. Whether the giver is of poor health or advanced age; and
  7. Whether there is a power of attorney between the two parties.

If all of these factors exist, then a confidential relationship will be found.  This means that the recipient is in a position to “exercise a dominant influence” over the giver due to the giver’s dependence on the recipient.  And that is half the battle.  The confidential relationship usually raises a presumption that undue influence caused the challenged transfer. The burden is then on the recipient to prove that there was no undue influence.

Filed Under: Alabama Probate, Estate Planning, General Probate, Mississippi Probate Tagged With:

Alabama Small Estate Procedure Amended

May 7, 2009 By 2 Comments

Alabama Probate Attorneys Have Better Alternative for Small Estates

The Alabama legislature recently made a few much-needed changes to the Summary Distribution of Small Estates provisions of the Alabama Probate Code.  Summary Distribution is designed to allow for quick and easy distribution of small estates, without the need for a full probate proceeding.

The problem with the old Small Estates procedure was that small meant small.  As in very small.  The procedure was only available for estates with a value of less than $3,000.00.  This low value requirement made the provision virtually useless since the vast majority of estates are worth more than $3,000.00.

The old law also required notice to be published once a week for three consecutive weeks.  The surviving spouse (or other claimants) had to wait 45 days from the date the Petition for Summary Distribution was filed and at least 21 days from the date that notice was first published. These requirements added administrative complexity to what was presumably intended to be a simple proceeding.

On May 7, 2009, the Alabama legislature addressed some of the deficiencies in the Summary Distribution of Small Estates law. As amended, the dollar threshold for small estates has been raised from $3,000.00 to $25,000.00.  The $25,000 threshold is now indexed for inflation.

The 2009 amendment also streamlines the procedural requirements.  The 45/21 day notice has been replaced by a simple 30 day notice from the date that the notice of the Petition for Summary Distribution is first published.  And instead of having to publish notice in the news paper for three consecutive weeks, one publication will now suffice.

These amendments should make the Summary Distribution of Small Estates procedure more useful to Alabama probate attorneys who are seeking quick and cost-efficient probates for their clients.

Filed Under: Alabama Probate Tagged With: