Do I Need a Written Will for Estate Planning in Alabama?
When we talk about estate planning in Alabama and the last will and testament, we refer to how your assets will be handled after you’ve passed away.
The term assets include many things, such as your house or other properties, business, cars, artwork or other collections, stocks, pensions, life insurance, and even your household goods. The entire purpose of planning an estate is to ensure your family’s wellbeing and that your children and spouse are cared for.
In some cases, people plan to leave their entire estate to a charitable cause as another way of leaving a legacy.
A lot goes into estate planning and the probate process. You need to consider things like your funeral arrangements, your beneficiaries, setting up a durable power of attorney, estate taxes, and much more.
Of course, the most basic—and arguably the most critical—step in estate planning in Alabama is drafting your last will and testament. However, many people don’t realize the importance of a will or what these documents can and can’t do.
In this article, we’re going to cover what you need to know about writing a will in the state of Alabama and why you absolutely need one for estate planning.
Read on to learn more.
What Exactly Is a Will?
Your last will and testament is a legal document. The will lays out your final wishes for how you want your assets distributed and how you want your family (and pets) to be cared for after you pass away.
When it comes to estate planning, your will is what ensures that all of your wishes are carried out by your personal representative or executor. It also makes life easier for your family or beneficiaries when distributing your property or finances.
When the document is drawn up, it usually begins with a statement that you are of legal age and are writing the will without duress (of free will). It also verifies that you are of sound health and mind during the time of the will’s drafting. Lastly, this portion of the document also identifies who you are. It includes a direct statement that this is your final will, overturning any previously written wills, testaments, or other legal documents.
The rest of the instrument will describe how your assets will be distributed, who will be your children’s assigned guardian, and any other necessary instructions regarding your properties and finances.
Other related documents outside of the will should include instructions regarding your funeral and burial wishes.
When writing your will, you must also name an executor or personal representative—i.e., the person you’ll be assigning responsibility to for carrying out the will’s instructions. This person will also be responsible for paying any outstanding estate debts or taxes, as well as overseeing the distribution of your assets.
Lastly, for your last will and testament to be legally effective, it must be signed by yourself as well as two witnesses. Best practices also involve a notary public witnessing and attesting to each person’s signature.
The type of will described above is usually referred to as a testamentary will. It is the most common type of will you can produce. However, there are several different types of wills, including:
● Holographic wills are handwritten and signed by only the individual in question, without witnesses. Holographic wills are usually written when an individual is close to death and witnesses are unavailable. In some states, such as Alabama, holographic wills aren’t recognized by the law as enforceable.
● Oral wills are given when the individual speaks his or her last wishes to one or more witnesses. However, since there’s a lack of a written document, oral wills are even less recognized than holographic wills. Alabama does not allow oral wills.
● Pour-over wills are considered supplementary documents that accompany a testamentary will. These are typically used to designate the creation of a trust for your assets.
● Mutual wills are sometimes used among married couples. It’s a “joint will” that establishes asset distribution and is used once one or both parties have passed. Joint wills tend to be back ideas for couples.
Why Do You Need a Will in Alabama?
Many people think of a last will and testament as something that only rich people with multiple properties and other extensive or valuable assets need. However, a will is a necessary document to have regardless of how much your worth.
Having a will ensures that:
● You get to dictate who receives your assets and how much each person will receive
● You get to keep your assets from ending up in the wrong hands, whether it be an ex-spouse, a recently discovered relative, an estranged parent, a nasty business partner, and so on
● You get to assign someone to take care of your children rather than leaving it up to the probate court
● The beneficiaries you name will have an easier time accessing your assets through the probate process
● You get to plan out your estate taxes to save money, such as giving gifts or making charitable donations
Once it’s in the will, what you say usually goes. Of course, there is the exception that someone close to you may contest your last will and testament if they feel they’ve been unfairly left out. However, to contest a will in probate court, they would have to provide hard evidence that you were not of sound health or mind or that you were in some way under duress when drafting the document.
What Happens if You Die Without a Will in Alabama?
When a person passes away without a will, it’s referred to as “intestate.” If you pass away intestate, then all of your assets, children (under the age of 18), and pets will essentially be subject to administration by the state.
Dying intestate means that it’s up to the State of Alabama and the probate judge to oversee the distribution of your assets and the care of your children and pets. A specific formula is usually followed by the officials and the probate court to administrate your Alabama assets.
In Alabama, your assets will be distributed among your closest relatives under what is referred to as “intestate succession.” Intestate succession only includes the assets that would have passed through your will, had you written one.
The assets that would be excluded from intestate succession include:
● Property that has been transferred to a living trust
● Life insurance proceeds
● IRA, 401(k), and any other retirement account funds
● Any securities that have been held in a transfer-on-death (TOD) account
● Property that you own jointly with someone else
These assets will automatically be passed over to the surviving “co-owner” of the accounts, such as a spouse or a named beneficiary.
Under Alabama’s intestate succession formula, who gets what from your estate depends entirely on whether or not you have living children, parents, or other close relatives at the time of your passing.
Here’s the basic overview:
● If you have children but no spouse, then your children will inherit everything
● If you have a spouse but no children and no parents, then your spouse will inherit everything
● If you have a spouse and children conceived between the two of you, then your spouse will inherit the first $50,000 of your intestate property and half the balance of the remaining assets. Your children will inherit the remaining intestate property
● If you have a spouse and children that are not biologically related to that spouse, then the intestate property is split directly in half between the two parties
● If you have a spouse and surviving parents, then your spouse will inherit the first $100,000 of your intestate property plus half the balance of that property, and your parents will inherit the remaining intestate property
● If you only have surviving parents, then they will inherit 100% of your intestate property
● If you only have surviving siblings, then they will inherit 100% of your intestate property
When it comes to your surviving children, the size of each child’s share will depend on how many children you have and whether or not you’re married. Additionally, for any of your children to inherit your intestate property, they must legally be your children under Alabama law.
That includes biological children, legally adopted children, and even grandchildren. Foster children, stepchildren that were never legally adopted, and children that were lawfully adopted into another family outside of yours may be excluded from any intestate inheritances.
Lastly, if you have no blood-related family or children during your time of passing, then all of your property will “escheat” or be handed over to the state government. Nobody wants this result. The possibility of escheat to the state is part of the reason why a will is so important.
How to Form a Will in Alabama
To draft a legal will in Alabama, you must be of legal age (19 or older) and sound mind. The document must also be written—no voice recordings, no videos—and must be signed in front of two witnesses and then signed by those witnesses.
Within the will, you’ll need to decide on:
● The property and assets you want to include
● Who will inherit said property and assets
● The executor that will handle your estate
● Who will be the guardian of your children
● Who will manage your children’s property
You can always make changes to your will or revoke it entirely at any time.
Your last will and testament is an essential document to have on standby, especially if you have a family.
When it comes to estate planning in Huntsville, AL, it’s always a good idea to consult with an attorney that specializes in wills, trusts, and estate planning. In fact, they make for legitimate witnesses during the signing or revoking of your will.
So, contact us today to speak with Sarah S. Shepard or another Huntsville attorney to help you with your estate planning.