How to Manage Estate Expenses and Ongoing Bills During Probate in Alabama

Detailed Answer

When a loved one passes away in Alabama, the probate court appoints a personal representative to manage the estate. This person—often called an executor or administrator—must identify assets, secure property, and pay valid debts and ongoing bills from estate funds. Here’s how to handle each step.

1. Obtain Letters of Administration or Testamentary

First, file a petition with the local probate court. Once approved, the court issues letters of administration (Ala. Code § 43-2-102). These documents grant authority to collect assets, open a bank account in the estate’s name, and pay bills.

2. Inventory and Secure Estate Assets

Within three months of appointment, prepare and file an inventory of real and personal property. Safeguard valuable items and secure real estate by maintaining insurance and paying property taxes.

3. Open a Dedicated Estate Bank Account

Deposit checks, dividends, pending payables, and other income into a probate account. Never mix estate funds with personal accounts. This separation streamlines accounting and protects against fiduciary breaches.

4. Give Notice to Creditors

Under Ala. Code § 43-2-820, you must publish a notice in a local paper and mail notices to known creditors. Creditors then have up to six months to file claims against the estate.

5. Prioritize and Pay Debts

Alabama law sets a statutory priority for claims:

1. Funeral, burial, and last illness expenses (up to $5,000 for funeral services).
2. Administration expenses, including court costs and personal representative fees.
3. Secured debts like mortgages and liens.
4. Unsecured creditors (credit cards, medical bills).

Funeral and Family Allowances

You may pay reasonable funeral expenses before other claims. Alabama grants a family allowance—an amount set by the court—to support the surviving spouse or minor children.

6. Manage Ongoing Bills

Keep insurance, utilities, mortgage payments, and maintenance costs current to preserve estate value. If the estate lacks liquid funds, petition the court for interim distributions or to borrow against certain assets.

7. Seek Court Approval for Extraordinary Expenses

Major repairs, legal fees, or property sales may require prior court permission. File a petition detailing the expense, its necessity, and cost estimate.

By following these steps—backed by Ala. Code § 43-2-102 and § 43-2-820—you ensure transparent, lawful handling of estate expenses and ongoing bills during probate.

Helpful Hints

• Keep detailed receipts and account statements to simplify final accounting.
• Maintain clear communication with heirs and beneficiaries.
• Use estate funds exclusively to avoid personal liability.
• Consult a probate attorney before selling major assets.
• Monitor creditor deadlines to prevent late claims.

Disclaimer: This article provides general information about Alabama probate law. It does not constitute legal advice. Consult a licensed attorney to address your specific circumstances.