Detailed Answer
Disclaimer: This information is for educational purposes only and does not constitute legal advice. Always consult a qualified attorney regarding probate matters in Alabama.
When a person dies owning a bank account in Alabama, the funds remain part of the decedent’s estate until properly distributed. Accessing and withdrawing those funds requires compliance with Alabama’s Probate Code.
1. Determine Whether a Small Estate Procedure Applies
If the total value of the decedent’s personal property (including bank accounts) is below $100,000, you may use the Affidavit in Lieu of Administration under Ala. Code § 43-2-280. This expedited process lets a successor withdraw funds without formal probate. You must:
- Wait at least 10 days after death.
- Prepare a notarized affidavit stating the decedent’s death, heirs, and that the estate qualifies as a small estate. (See Ala. Code § 43-2-280.)
- Present the affidavit and certified death certificate to the bank.
- Withdraw up to the maximum permitted by statute.
2. Open Formal Probate and Appoint a Personal Representative
If the estate exceeds the small-estate threshold or if there is a will, file a petition with the probate court in the county where the decedent lived. The court will issue Letters Testamentary (if there is a will) or Letters of Administration (if no will) to the personal representative.
Key steps:
- File a death certificate, original will (if any), and petition for probate. (See Ala. Code § 43-2-300–§ 43-2-315.)
- Obtain certified letters from the court.
- Publish any required notice to creditors.
3. Collect and Manage Bank Funds
Once you have your letters:
- Present the Letters of Administration/Testamentary and a certified copy of the death certificate to each bank holding the decedent’s accounts.
- Banks are required to honor those letters and release funds to the personal representative. (See Ala. Code § 43-2-360.)
- You may withdraw funds to pay funeral expenses, outstanding debts, taxes, and administrative costs before distributing the remainder to beneficiaries.
4. Distribute Remaining Funds
After settling debts and expenses, distribute the balance according to the decedent’s will or, if there is no will, under Alabama’s intestacy laws. Make sure to keep detailed records of all transactions.
Helpful Hints
- Keep originals and certified copies of all documents; banks typically will not accept uncertified copies.
- Verify the small estate threshold before using the affidavit process, as misrepresentation can lead to personal liability.
- Notify all known creditors to avoid unexpected claims after distribution.
- Consider opening an estate checking account to separate estate funds from personal funds.
- Retain a probate attorney if the estate is complex or if you encounter creditor disputes.