Alabama

The information given on this page is for educational and informational purposes only, and does not constitute any legal or tax advice or opinion. This page is meant to give a quick start to research by other professionals, but it should absolutely not be relied upon for any purposes whatsoever. Additionally, this page is kept current only as our time allows, and the information given here may not be current. We make NO GUARANTEES as to the accuracy of the information herein and you should not rely on it. Even professionals who use this information must independently verify whether it is correct and current.

Nothing in the information given below should imply that the drafters of this webpage are admitted to practice law in the referenced state or have any special expertise in the areas listed. Nothing herein should be construed as a solicitation by the drafters of this website to practice law in the referenced state. Persons desiring planning should contact a licensed attorney or other appropriate planning professional in this state. Certainly, nothing herein is any substitute for the services, advice, or counsel of a properly licensed attorney in the relevant state!

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Alabama Asset Protection Overview

An Alabaman debtor is not permitted to elect the exemptions provided under the federal Bankruptcy Code. Statute

Alabama is known as one of the two greatest plaintiffs’ havens in America (the other is the Beaumont area of Eastern Texas), with local juries giving ridiculously high verdicts and the appellate judges perfectly content to allow them. So, think twice about placing a business in Alabama. The Alabama legislature apparently doesn’t think that My Sweet Home Alabama is worth much, since only $5,000 of the home’s value may be protected from creditors – double that for a couple. Alabama life insurance is like a box of chocolates – if properly structured, it can be protected from creditors. However, annuities are fair game past $250 per month. Otherwise, Alabama’s laws are unremarkable

Alabama Statutory Creditor Exemptions

For additional detailed information on the use of life insurance, annuities, pension plans, and employee benefit plans for wealth preservation and asset protection, see advanced life insurance

Alabama Homestead

• The homestead exemption limit in Alabama is $5,000 for real property. The property may not exceed 160 acres. A couple may double these amounts.

Statute

• Exemptions as to liens not affected.

Statute

• Exemption as to the alienation by married persons.

Statute

• A homestead declaration must be filed before the homestead is sold.

Statute

• It is important to note that Alabama Title 6 Article 1 Section 6-10-20 through 6-10-43, deals with the Claims and Contests of Exemptions.
  
  Also, important to note that Alabama Title 6 Article 3 Section 6-10-120 through 6-10-126, deals with the Waiver of Rights to Exemptions. The general Code of Alabama can be accessed below:

General Code of Alabama

Alabama Homestead cases

• James v. Thaggard,
  795 So.2d 738 (Ala.Civ.App. 03/30/2001)

• Ponds v. Ponds,
  757 So.2d 463 (Ala.Civ.App. 01/07/2000)

Alabama Life Insurance

• Life insurance proceeds are exempt, if there is a clause that prohibits the proceeds from being used to pay the creditors of the beneficiary (other than the policy owner). If the policy owner is the beneficiary, the proceeds are not exempt under this statute.

Statute

• Life insurance proceeds are exempt if the beneficiary is the insured's spouse or child.

Statute

• Life insurance proceeds are exempt if the beneficiary is the wife of the insured.

Statute

Alabama Annuities

• Annuity contract proceeds, up to $250 per month, are exempt.

Statute

• Disability proceeds, up to $250, per month, are exempt.

Statute

Alabama IRAs & Pension Plans

• Whether an IRA qualifies as exempt depends on whether or not it meets the definition of a "qualified trust" in Alabama. [19-3-1]

Statute

• State employee pension plans are exempt. [36-27-28]

Statute

Alabama Fraudulent Transfers

For additional detailed information relating to fraudulent transfers, including the text of the Uniform Fraudulent Transfers Act, see fraudulent transfers

Alabama Fraudulent Transfer Act

• Alabama Fraudulent Transfers Act

Alabama Fraudulent Transfer Cases

U.S. Bankruptcy Court

• In re Terry Mfg. Co.,
  2006 WL 1729678 (Bkrtcy.M.D.Ala. 05/30/2006)

State Appellate Court

• J. Steve Wallace and Lucy S. Wallace v. Frontier Bank, N.A., et al.,
  No. 1030814 (Ala. 12/17/2004)

• Benny J. George v. Antoinette A. Raine et al.,
  No. 1030752 (Ala. 07/23/2004)

• Thompson Properties 119 AA 370, Ltd. v. Hide,
  2004.AL.0000445 (Ala. 07/09/2004)

• American National Red Cross v. ASD Specialty Health Care, Inc.,
  No. 1020446 (Ala. 10/03/2003)

• S.J. Holding Company, Inc. v. Kadco, Inc.,
  2003.AL.0000502 (Ala. 06/27/2003)

• Woodard v. Funderburk,
  No. 2010451 (Ala.Civ.App. 09/27/2002)

• Devan Lowe, Inc. v. Stephens,
  2002.AL.0000304 (Ala.Civ.App. 04/26/2002)

• Thompson Properties v. Birmingham Hide & Tallow Co., Inc.,
  2001.AL.0000904 (Ala. 11/02/2001)

• Cox v. Hughes,
  781 So.2d 197 (Ala. 09/22/2000)

• Folmar & Associates v. Holberg,
  776 So.2d 112 (Ala. 08/04/2000)

• Kilpatrick v. Tetzlaff,
  794 So.2d 1120 (Ala.Civ.App. 06/02/2000)

• A.T. Stephens Enterprises, Inc. v. Johns,
  757 So.2d 416 (Ala. 01/21/2000) Civil Conspiracy

• Cotton Energy Corp. v. Smith,
  718 So.2d 1142 (Ala.App. 07/31/1998)

• Donald Seymore et al. v. Vickie Taylor and Virginia Bruemmer,
  1997.AL.18582 (Ala.App. 12/19/1997)

• Hope Developers v. Dwy Nal Nixon Vandiver,
  665 So. 2d 910 (Ala. 05/19/1995)

• Judy K. Bruce Holley v. Vance Holley,
  660 So. 2d 608 (Ala.App. 03/24/1995)

• G. Keith Varner v. Ann P. Varner,
  662 So. 2d 273 (Ala.Civ.App. 12/16/1994)

• McPherson Oil Company v. James W. Massey,
  643 So. 2d 595 (Ala. 06/24/1994)

• Leon C. Baker v. J. R. Bennett and Laura Jean Bennet,
  644 So. 2d 901 (Ala. 05/27/1994)

• James C. Prescott v. Herchel Baker,
  644 So. 2d 877 (Ala. 05/06/1994)

• Jack L. Giles v. Charles Ingrum,
  583 So. 2d 1287 (Ala. 06/14/1991)

• John W. McDonald v. U. S. Die Casting & Development Company,
  541 So. 2d 1064 (Ala. 03/10/1989)

• Pattillo v. Pattillo,
  414 So.2d 915 (Ala. 04/02/1982)

• Muscogee Construction Co. v. Peoples Bank & Trust Co.,
  238 So.2d 883 (Ala. 07/16/1970)

• Deloney v. U.S. Fidelity,
  133 So.2d 203 (Ala. 09/21/1961)

• Gordon v. Norris,
  101 So.2d 542 (Ala. 03/20/1958)

• R. B. Hyatt ET AL. v. W. K. Compton,
  80 So.2d 650 (Ala. 05/26/1955)
  

Alabama Trusts

For additional detailed information relating to the use of trusts for asset protection, including foreign and domestic asset protection trusts, see trusts.

Alabama Trust Act (Non Self-Settled)

• Alabama Trust Act

Alabama Business Entities

Alabama Acts

• Alabama Corporation Act Part A

• Alabama Corporation Act Part B

• Alabama Limited Partnership Act

• Alabama Limited Partnership Act Part B

• Alabama Limited Liability Company Act

  Effective January 1, 2000, all LLC's organized under Alabama law, as well as businesses doing business in the state of Alabama, shall be subject to the Business Privilege Tax:

  http://www.ador.state.al.us/incometax/BPT_INDEX.htm

Alabama Charging Order Statute

• Alabama Charging Order (LLC)

Alabama Charging Order Cases

• In re John David Powell, Debtor
  No. 03-44086-JSS-7 (Bankr ND Ala. 04/19/2005)

Alabama Alter Ego & Corporate Veil Cases

• Culp v. Economy Mobile Homes, Inc.,
  No. 1011759 (Ala. 03/19/2004)

• Calactic Employer Services, Inc. v. McDorman,
  No. 2020094 (Ala.Civ.App. 07/11/2003)

• Thompson Properties v. Birmingham Hide & Tallow Company, Inc.,
  839 So.2d 629 (Ala. 06/21/2002)

• Mary S. Backus v. Jimmy H. Watson,
  619 So. 2d 1342 (Ala. 03/26/1993)

Useful Alabama Links

For additional detailed information relating to financial frauds and tax scams, see http://www.quatloos.com

• Alabama Secretary of State
• Alabama Attorney General
• Alabama Bar Association

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