Alabama: Which Assets Go Through Probate and Which Pass Directly to Survivors

Detailed Answer — How Assets Move After a Death Under Alabama Law

When someone dies in Alabama, assets follow different paths depending on how title or beneficiary designations are set up before death. Some assets transfer immediately to survivors by operation of law or contract, while other assets must be handled through court administration (probate). Below is a practical breakdown with common examples and why each category is treated that way.

Assets that usually pass directly to survivors (no probate required)

• Assets with a named beneficiary: Life insurance proceeds, IRAs, 401(k)s, annuities, and other retirement accounts pay directly to the designated beneficiary named on the contract or plan. The beneficiary designation controls distribution regardless of what a will says.
• Payable-on-death (POD) or Transfer-on-death (TOD) accounts: Bank accounts or certain brokerage accounts that have a POD or TOD designation pass directly to the named payee at death.
• Jointly owned property with right of survivorship: Real estate or bank accounts owned jointly with rights of survivorship (commonly spouses or other joint tenants) automatically pass to the surviving joint owner.
• Property held in a trust: Assets titled in a properly funded revocable or irrevocable trust pass under the trust terms and generally avoid probate.
• Assets with a transfer-on-death deed or similar statutory transfer: If Alabama recognizes a valid beneficiary deed/TOD deed or similar statutory mechanism for real property and it was properly executed, the property transfers under that instrument.
• Small value assets collectible with a small‑estate procedure: Alabama law provides simplified procedures for certain small estates so some property can be transferred to heirs or beneficiaries without full probate (see relevant probate code for thresholds and rules).

Assets that typically must go through court administration (probate)

• Property titled solely in the decedent’s name without beneficiary designation: This includes real estate, bank accounts, vehicles, and valuable personal property titled only to the deceased with no joint owner or beneficiary.
• Personal property and household goods of appreciable value: Items that must be inventoried and distributed according to the will or Alabama intestacy rules if there is no will.
• Assets that require clear chain-of-title changes: Some transfers (for example, real property sales or clearing liens) require probate court action to issue letters testamentary or letters of administration so the personal representative can act.
• Situations where creditors must be notified and paid: The probate process provides a structured way for creditors to present claims against the estate and for valid debts to be paid before distribution to heirs or beneficiaries.

How Alabama probate and intestacy rules affect real-life situations

Hypothetical example:

Alice dies owning a house titled only in her name, a bank account titled jointly with her husband as joint tenants with right of survivorship, a life insurance policy naming her daughter as beneficiary, and an IRA naming her brother as beneficiary.

• The house would normally go through probate because it’s titled solely in Alice’s name.
• The joint bank account would pass directly to the husband by survivorship.
• The life insurance proceeds would pay directly to the named daughter, bypassing probate.
• The IRA would pass to the named brother as beneficiary without probate involvement.

Key Alabama statutory sources

Alabama’s probate and decedents’ estates law is located in Title 43 of the Code of Alabama. Those statutes govern wills, probate procedure, administration, intestate succession, and simplified or small‑estate procedures. For the statutory text and chapters, see the Code of Alabama, Title 43 (Probate Code) on the Alabama Legislature’s site: https://alisondb.legislature.state.al.us/acas/codeofalabama/1975/coatoc.htm

Practical points about timelines and actions

• Even when some property passes outside probate (e.g., life insurance), the personal representative may still need to know about those assets to prepare an inventory and account for estate administration.
• If multiple assets require probate, the court will appoint a personal representative (executor or administrator) who will gather assets, pay debts and taxes, and distribute what remains.
• Designating beneficiaries and using joint ownership or trust planning can reduce the size of the probate estate and speed transfers, but each method has tradeoffs for taxes, creditor exposure, and control.

When to consult an Alabama probate attorney

Consider speaking with a probate attorney if any of the following apply:

• Significant assets are titled solely in the decedent’s name.
• The decedent left a will but it’s unclear or contested.
• There are potential creditor claims or complex tax issues.
• Family members disagree about who should receive specific property.
• You are trying to determine whether a small‑estate procedure is available.