The minor child reaches age 21 in regard to custodial transfers made by irrevocable lifetime gift, will or trust, or the exercise of power of appointment.Alabama has a state income tax, structured as a progressive tax on income.
Tax rates range from 2% - 5%.
Alabama does not impose an inheritance tax.
Alabama imposes an estate tax equal to the maximum credit allowed under IRC Sec. 2011 for paid state estate and inheritance taxes. However, the current federal tax code does not permit a credit for paid state estate or inheritance taxes. Therefore, Alabama has no credit estate tax in effect at this time.
Alabama imposes a GST tax equal to the maximum credit allowed under IRC Sec. 2604 for paid state GST tax. However, the current federal tax code does not permit a credit for paid state GST tax. Therefore, Alabama has no GST tax in effect at this time.
Alabama does not impose a gift tax.
The minimum age of a person competent to make a will is 18.
The number of witnesses necessary to execute a will is two.
The original custodial gift may be a life insurance policy or annuity contract.
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor's life if the minor's estate is the sole beneficiary, or (2) a policy on a third party in whom the minor has an insurable interest, if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
The minor child reaches age 21 in regard to custodial transfers made by irrevocable lifetime gift, will or trust, or the exercise of power of appointment.
The minor child reaches age 19 in regard to other custodial transfers.
The minor child dies.
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Each state describes its own distribution pattern of how property passes to a decedent's spouse, children, parents and siblings. If no such individuals are living, state laws specify other takers among more distant ancestors before awarding property to the state through "escheat" provisions. We do not trace devolution of property beyond those noted above, but cite appropriate statutes for those interested in additional detail.
Many states refer to their distribution regime by simply stating that the heirs of predeceased individuals take "by representation." We use only the statutory verbiage, but may cite other statutory guidance when it exists.
States vary in the way they refer to descendants, using such terms as "issue" or simply children or grandchildren. We use the term "descendant," unless usage of different term adds clarity.
Some states address situations where misconduct or abuse causes forfeiture of a right to receive a share of the estate. Those interested in this information should see the state statutes.
The estate goes to the surviving spouse, as follows:
If there are no surviving descendants or parents—100% of the estate
If there are surviving parent(s) but no surviving descendants—$100,000 plus 50% of the balance of the estate
If there are surviving descendants, all of whom are also descendants of the spouse—$50,000 plus 50% of the balance of the estate
If there are surviving descendants, at least one of whom is not also a descendant of the spouse—50% of the estate
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
100% (or applicable portion) to descendants, by representation (see Ala. Code §43‐8‐45)
If there is no surviving spouse or descendant:
100% to surviving parent or parents equally
If there is no surviving spouse, descendant or parent:
100% to descendants of parents, by representation (see Ala. Code §43‐8‐45)
If none of the above:
Intestacy laws outline further distribution steps to the level of grandparents and related individuals. See Ala. Code §43‐8‐42(4).
If no legally described recipient can be found, estate assets go to the state of Alabama.
Click here for more information on intestacy.
Non-qualified Annuity Proceeds: A total amount of $250 per month is exempt.
Life Insurance Cash Value: Exempt from creditors of both the original owner and the insured (though not if the policy beneficiary is the same).
Life Insurance Proceeds: Exempt from creditors of both the original owner and the insured (though not if the beneficiary is the same). However, if the insured is the owner’s spouse, the interest of the owner is exempt. And, if the insured is the owner, the interest of a beneficiary spouse is exempt.
Digital Assets: Alabama follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
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