Detailed answer — how Alabama law treats sale proceeds after an intestate death

When a person dies without a will (intestate) in Alabama, any money that represents the decedent’s property — including proceeds from a sale of property owned by the decedent — is generally treated as part of the decedent’s probate estate.

Key steps under Alabama law you should expect:

1. Identify whether the proceeds are probate or non‑probate.

   Not all funds go through probate. Money held in the decedent’s sole name, or funds generated by selling assets owned solely by the decedent, normally are probate assets. Funds that pass by operation of law (joint tenancy with right of survivorship, beneficiary/payable‑on‑death designations, life insurance or retirement plan beneficiary designations, or certain trust assets) generally pass outside probate to the named survivor or beneficiary.

2. Appointment of a personal representative (administrator).

   If the decedent did not name an executor, the probate court will appoint an administrator or personal representative to collect estate assets (including sale proceeds), pay valid claims, and distribute remaining assets under Alabama’s intestacy rules. See Alabama probate law (Title 43) for the court’s role in administering estates: Alabama Code Title 43 (Probate).

3. Collection and safekeeping of proceeds.

   The personal representative deposits sale proceeds into an estate account and keeps an accounting of receipts and disbursements.

4. Pay debts, taxes, and administration expenses.

   The administrator uses estate funds to pay funeral costs, creditor claims, taxes, and administration expenses. Only after valid claims and costs are paid can the remaining funds be distributed to heirs.

5. Distribution under Alabama intestacy rules.

   After debts and expenses are paid, the leftover proceeds are distributed to heirs according to Alabama’s intestacy statutes (the order of priority is set by statute). For the precise statutory rules on intestate succession, see the probate statutes: Alabama Code, Title 43 (Probate Law), Chapter 8 (Intestate Succession).

Common practical examples

• If a decedent sold a car before death and the sale proceeds sat in a bank account titled only in the decedent’s name, those funds are probate assets and will be handled by the representative and distributed under intestacy.
• If the decedent sold a jointly owned home whose proceeds were paid into a joint account held with right of survivorship, the surviving joint owner may automatically own the funds and they would typically avoid probate.
• If an asset was sold by the personal representative during probate (for example, selling real estate to raise cash to pay creditors), the net sale proceeds remain in the estate and are distributed after creditor claims are satisfied.

What if heirs disagree or a creditor claims the funds?

Disagreements among heirs or creditor disputes are resolved in probate court. The personal representative has a duty to notify creditors and follow Alabama’s probate procedures. If a creditor has a valid claim, it must be paid before heirs receive distributions. The probate court supervises this process.

Where to find the relevant Alabama statutes

Alabama’s probate and intestacy rules are located in Title 43 of the Alabama Code. For the statutory framework that governs appointment of administrators, estate administration, claims, and intestate succession, see:

• Alabama Code, Title 43 — Probate
• For practical probate resources, forms, and court contact information visit the Alabama Judicial System: judicial.alabama.gov

Helpful hints — practical steps when there are leftover sale proceeds

• Determine how the funds are titled. Check bank records and the payee on the sale check to see if proceeds already passed outside probate (joint account, POD/TOD).
• Contact the probate court in the county where the decedent lived to learn the requirements to open an estate or obtain summary or small‑estate relief.
• Look for beneficiary designations (life insurance, retirement accounts). These usually override a will or intestacy and pass outside probate.
• Keep careful records. The personal representative should keep receipts, bank statements, and a ledger showing how sale proceeds were used.
• If the estate is small, ask the probate court about simplified or summary administration procedures that can speed distribution.
• Before distributing funds, the personal representative must allow time for creditor claims and for the court to close the estate according to Alabama procedures.
• If heirs or potential claimants dispute ownership, consider mediation or ask the court to decide — do not distribute estate funds until disputes are resolved.