Life Estate Deed (Reserved Life Estate) - Alabama

LIFE ESTATE DEED (RESERVED LIFE ESTATE)

State of Alabama

Prepared By:
_____________________________________________
_____________________________________________

After Recording Return To:
_____________________________________________
_____________________________________________
_____________________________________________

Send Subsequent Tax Statements To (Remainderman):
_____________________________________________
_____________________________________________

Parcel Identification Number:
_____________________________________________

SPACE ABOVE THIS LINE FOR JUDGE OF PROBATE'S USE

IMPORTANT — THIS IS A TRADITIONAL RESERVED LIFE ESTATE DEED, NOT A "LADY BIRD"/ENHANCED LIFE ESTATE DEED.
By this deed the Grantor conveys the remainder in fee simple to the Remainderman now, while RESERVING a life estate to the Grantor (or a named life tenant). On the life tenant's death, the previously conveyed remainder becomes possessory without a transfer through the Life Tenant's probate estate (Ala. Code § 35-4-1).

Because this is a traditional life estate, the conveyance of the remainder is PRESENT and IRREVOCABLE. The life tenant CANNOT sell, mortgage, or revoke the deed, and cannot convey clear fee title, without the Remainderman joining in the conveyance. This is different from an enhanced life estate ("Lady Bird") deed, in which the life tenant retains the power to sell, mortgage, or revoke without the remainderman's consent. If you want a retained power to sell or revoke, use the separate Enhanced Life Estate / Lady Bird Deed form instead of this one.

DOCUMENT INFORMATION

LIFE ESTATE DEED

STATE OF ALABAMA
COUNTY OF _________________

KNOW ALL MEN BY THESE PRESENTS:

This Life Estate Deed is made this _____ day of _________________, 20_____.

ARTICLE I: PARTIES

Section 1.1 Grantor

_____________________________________________
(Name)

of _____________________________________________
(Address)

Marital Status (Recitation required for recording per Ala. Code § 35-4-73):
☐ A single person
☐ A married person (spouse joining below — required if this property is the marital homestead; see Ala. Code § 6-10-3)
☐ Husband and wife
☐ A widow/widower
☐ A _________________ [entity type], organized under the laws of _________________ [state]

hereinafter called "GRANTOR"

Section 1.2 Remainderman (Grantee)

_____________________________________________
(Name)

of _____________________________________________
(Address — required so subsequent tax statements may be mailed to the Remainderman)

Manner of Holding the Remainder:
☐ A single person
☐ As joint tenants with right of survivorship
☐ As tenants in common (state shares: ______________________)
☐ A _________________ [entity type], organized under the laws of _________________ [state]

hereinafter called "REMAINDERMAN" or "GRANTEE"

Section 1.3 Life Tenant (Measuring Life)

The life estate reserved by this deed is measured by the life of:

☐ The GRANTOR named in Section 1.1 (most common); OR
☐ The following named life tenant: _____________________________________________
(Name and address of the person whose life measures the estate)

hereinafter called the "LIFE TENANT." The natural life of the Life Tenant is the "MEASURING LIFE."

Section 1.4 Relationship of the Parties

The Remainderman is the Grantor's: _____________________________________________
(e.g., child, grandchild, spouse, sibling — a natural object of the Grantor's bounty)

ARTICLE II: CONSIDERATION

Section 2.1 Consideration Recital

This conveyance is made for and in consideration of the natural love and affection the Grantor has and bears for the Remainderman, and for no monetary consideration.

THE GRANTOR HAS RECEIVED NOTHING OF VALUE IN RETURN FOR THE REMAINDER CONVEYED.

ARTICLE III: CONVEYANCE — GRANTING CLAUSE AND RESERVATION

Section 3.1 Granting Clause (Remainder in Fee Simple)

WITNESSETH: That the GRANTOR, for the consideration set forth above, does hereby GRANT, BARGAIN, SELL AND CONVEY unto the REMAINDERMAN, and the Remainderman's heirs and assigns forever, the remainder in fee simple in and to the following described real property situated in _________________ County, State of Alabama, to-wit:

See Exhibit "A" attached hereto and incorporated herein by reference.

RESERVING UNTO THE LIFE TENANT, however, a LIFE ESTATE in and to said property for and during the full term of the natural life of the Life Tenant (the Measuring Life), as more particularly set forth in Article IV below.

The estate hereby created is expressly limited as a life estate with remainder and is not intended to be, and shall not be construed as, a fee simple absolute in the Remainderman during the Measuring Life (Ala. Code § 35-4-2).

Section 3.2 Legal Description

See Exhibit "A" attached hereto and incorporated herein by reference.

Derivation of Title (confirm county recording requirements):
Being the same property conveyed to GRANTOR by _________________________ [prior grantor] by deed dated _________________, recorded in ☐ Deed Book _______ at Page _______ ☐ Instrument No. _________________ in the Office of the Judge of Probate of _________________ County, Alabama.

Property Address: _____________________________________________

Parcel Identification Number: _____________________________________________

TOGETHER WITH all and singular the tenements, hereditaments, and appurtenances thereunto belonging, or in anywise appertaining.

ARTICLE IV: RESERVATION OF LIFE ESTATE

Section 4.1 Rights of the Life Tenant

The Life Tenant reserves and retains, for and during the entire Measuring Life, the exclusive right to possess, occupy, use, control, and enjoy the property, together with all rents, issues, and profits therefrom, to the same extent as the Life Tenant enjoyed before this conveyance. The Remainderman shall have no right of possession during the Measuring Life.

Section 4.2 Duties of the Life Tenant

During the Measuring Life, the Life Tenant shall, at the Life Tenant's own expense:

(a) Pay all ad valorem property taxes and assessments as they become due (and may claim any applicable homestead and age-related exemptions);

(b) Maintain casualty/hazard insurance on the improvements in a reasonable amount;

(c) Pay interest on any encumbrance to which the property is subject and keep the property free of liens chargeable to the Life Tenant;

(d) Make ordinary repairs and perform ordinary maintenance necessary to preserve the property.

Section 4.3 Duty Not to Commit Waste

The Life Tenant shall NOT commit or suffer waste upon the property and shall not do or permit any act that materially and permanently injures the inheritance or diminishes the value of the Remainderman's interest. The Remainderman, as the party in remainder, retains all remedies available at law and in equity for waste; consistent with Ala. Code § 35-4-270, no warranty or act of the Life Tenant operates against those in remainder or reversion, and no limitation runs against the Remainderman until the Remainderman becomes entitled to possession.

ARTICLE V: REMAINDER / POSSESSION

Section 5.1 Possession on Death of Life Tenant

Upon the death of the Life Tenant, the reserved life estate ends and the remainder becomes possessory. If a named Remainderman has died, the person entitled to that share is determined under Section 5.2. Probate of the Life Tenant's estate is not needed to transfer the remainder already conveyed by this deed. Recording a certified copy of the Life Tenant's death certificate is recommended to clear title of record.

Section 5.2 If a Remainderman Predeceases the Life Tenant

If any individual Remainderman dies before the Life Tenant, that Remainderman's share shall pass as follows (select ONE):

☐ To that Remainderman's issue (descendants), per stirpes, as substitute takers directly under this deed; this share does not pass through the deceased Remainderman's estate; OR

☐ Through the deceased Remainderman's estate, under that person's will or the law of intestacy; no substitute gift is made under this deed; OR

☐ To the surviving Remainderman(en) in equal shares (a class gift with right of survivorship among the remaindermen); OR

☐ As otherwise specified: _____________________________________________

ARTICLE VI: WARRANTY ELECTION

Select ONE:

Section 6.1 ☐ OPTION A — General Warranty

The GRANTOR covenants with the Remainderman that Grantor is seized of the property in fee simple, has good right to convey the remainder reserved as herein stated, that the property is free from encumbrances except as stated, and that Grantor WILL WARRANT AND DEFEND the title (subject to the reserved life estate) against the lawful claims of all persons whomsoever.

Section 6.2 ☐ OPTION B — Statutory (Special) Warranty

The GRANTOR WILL WARRANT AND DEFEND the title (subject to the reserved life estate) against the lawful claims of all persons claiming by, through, or under the GRANTOR, but none other.

Section 6.3 ☐ OPTION C — Quitclaim (No Warranty)

The GRANTOR conveys only such right, title, and interest as Grantor may have, WITHOUT ANY WARRANTY OF TITLE, express or implied. It is expressly agreed, pursuant to Ala. Code § 35-4-271, that the words used herein shall NOT be construed as any covenant of warranty, seisin, or against encumbrances.

ARTICLE VII: LIMITATIONS ON ALIENATION (TRADITIONAL LIFE ESTATE)

Section 7.1 No Power to Convey or Encumber the Fee Alone

This is a traditional reserved life estate. Accordingly:

(a) The Life Tenant alone CANNOT convey, mortgage, encumber, or otherwise transfer fee simple title to the property; the Life Tenant may convey or encumber only the Life Tenant's own life estate.

(b) The Remainderman alone CANNOT convey possession during the Measuring Life; the Remainderman holds only the future (remainder) interest until the Life Tenant dies.

(c) To convey clear, marketable fee simple title during the Measuring Life, the Life Tenant and the Remainderman(en) must ALL join in the deed.

(d) This deed reserves NO power in the Life Tenant to sell, mortgage, gift, convey, or revoke without the Remainderman's joinder. It is IRREVOCABLE. (Contrast: an enhanced life estate / "Lady Bird" deed, which retains such powers — see the notice at the top of this deed.)

ARTICLE VIII: EXCEPTIONS AND RESERVATIONS

Section 8.1 Subject To

This conveyance is made subject to:

(a) Ad valorem taxes for the year 20_____ and subsequent years;

(b) All applicable zoning ordinances, building codes, and governmental regulations;

(c) All restrictions, covenants, conditions, easements, rights-of-way, and reservations of record;

(d) All matters disclosed by an accurate survey and inspection of the property;

(e) Any existing mortgage, deed of trust, or lien of record;

(f) The following specific exceptions:

☐ None

☐ As set forth below:
_____________________________________________
_____________________________________________

ARTICLE IX: TAX AND MEDICAID NOTE

TAX, MEDICAID, AND ESTATE-PLANNING NOTICE (NOT LEGAL OR TAX ADVICE).

• Medicaid 5-year lookback. Conveying the remainder is a transfer of an asset for Medicaid long-term-care purposes. If the Life Tenant applies for Medicaid within five (5) years of recording, the transfer of the remainder's value may trigger a transfer-penalty (ineligibility) period. The retained life estate itself is generally not a countable resource while the Life Tenant lives. Alabama's estate-recovery practice as to non-probate life estates should be confirmed with current counsel.
• Estate inclusion and basis (26 U.S.C. §§ 2036, 1014). If the Grantor retains a life estate, § 2036 generally includes the affected interest in the Grantor's gross estate at the Grantor's death, subject to the statute's sale exception. A life estate granted to a different person does not by itself establish a retained Grantor interest under § 2036. Section 1014 separately governs a Remainderman's basis when property passes from a decedent; obtain transaction-specific tax advice.
• Federal gift tax on the remainder (26 U.S.C. §§ 2501, 2702; Form 709). Conveying the remainder is a completed gift of the remainder interest. The gift's value is the property's value reduced by the actuarial value of the retained life estate, computed using IRS valuation tables (note that § 2702 may, in family transfers, value the retained interest at zero so the entire value is treated as the gift). A completed gift of the future remainder generally requires IRS Form 709 regardless of value because the annual exclusion does not apply to future interests.

Consult an elder-law/Medicaid attorney and a CPA before recording this deed.

ARTICLE X: TRANSFER (RECORDATION) TAX DECLARATION

Section 10.1 Alabama Recordation Tax (Ala. Code § 40-22-1)

AN UNSOLD REMAINDER CONVEYANCE REQUIRES PROOF OF VALUE. For a remainder interest conveyed without a sale, Ala. Code § 40-22-1 requires proof of the actual value of the property interest conveyed; a sale instead requires proof of its actual purchase price. A life estate deed conveys the remainder interest (the value of the property reduced by the actuarial value of the retained life estate). Confirm with the Judge of Probate how recordation tax is computed on a remainder-only conveyance; expect tax based on the value transferred.

Transfer Tax Rate: $0.50 per $500 of value (or fraction thereof) — effective rate 0.1% / $1.00 per $1,000.

Value of Interest Conveyed (Remainder): $_____________________

Recordation Tax Due: $_____________________

Section 10.2 Real Estate Validation Form

☐ Department of Revenue actual-value form attached under Ala. Code § 40-22-1(c), unless an exception applies, stating the actual value of the interest conveyed.

ARTICLE XI: EXECUTION

Section 11.1 Grantor's Signature

IN WITNESS WHEREOF, the GRANTOR has hereunto set Grantor's hand and seal this _____ day of _________________, 20_____.

GRANTOR(S):

_____________________________________________ (SEAL)
Signature

_____________________________________________
Printed Name

Named Life Tenant (if different from Grantor — joining to confirm reservation):

_____________________________________________ (SEAL)
Signature

_____________________________________________
Printed Name

SPOUSE (required if property is the marital homestead — see Ala. Code § 6-10-3; spouse must also be separately acknowledged):

_____________________________________________ (SEAL)
Signature

_____________________________________________
Printed Name

ARTICLE XII: ACKNOWLEDGMENT

Section 12.1 Alabama Acknowledgment (Individual)

STATE OF ALABAMA
COUNTY OF _________________

I, the undersigned authority, a Notary Public in and for said County in said State, hereby certify that _________________________, whose name(s) is/are signed to the foregoing conveyance, and who is/are known to me, acknowledged before me on this day that, being informed of the contents of the conveyance, he/she/they executed the same voluntarily on the day the same bears date.

GIVEN under my hand and seal this _____ day of _________________, 20_____.

_____________________________________________
Notary Public

_____________________________________________
Printed Name of Notary

My Commission Expires: _____________________________________________

[NOTARIAL SEAL]

Section 12.2 Alabama Acknowledgment (Entity)

STATE OF ALABAMA
COUNTY OF _________________

I, the undersigned authority, a Notary Public in and for said County in said State, hereby certify that _________________________, who is known to me as the _________________________ [title] of _________________________ [entity name], and who is known to me, acknowledged before me on this day that, being informed of the contents of the conveyance, he/she executed the same voluntarily as the act and deed of said entity on the day the same bears date.

GIVEN under my hand and seal this _____ day of _________________, 20_____.

_____________________________________________
Notary Public

_____________________________________________
Printed Name of Notary

My Commission Expires: _____________________________________________

[NOTARIAL SEAL]

Section 12.3 Alabama Acknowledgment (Homestead Spouse, If Applicable)

STATE OF ALABAMA
COUNTY OF _________________

I, the undersigned authority, a Notary Public in and for said County in said State, hereby certify that _________________________, spouse of the Grantor, whose name is signed to the foregoing conveyance and who is known to me, personally appeared before me and, being informed of its contents, acknowledged that he/she voluntarily signed and assented to the conveyance.

GIVEN under my hand and seal this _____ day of _________________, 20_____.

_____________________________________________
Notary Public

_____________________________________________
Printed Name of Notary

My Commission Expires: _____________________________________________

[NOTARIAL SEAL]

EXHIBITS

EXHIBIT A - LEGAL DESCRIPTION

Legal Description of Property:

Situated in _________________ County, State of Alabama:

_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________

Parcel Identification Number: _____________________________________________

ALABAMA RECORDING REQUIREMENTS AND INFORMATION

Recording Requirements

Important Alabama Notes

1. Traditional vs. Lady Bird. This deed is a traditional, irrevocable reserved life estate. The life tenant cannot sell, mortgage, or revoke without the remainderman joining. For a retained power to sell/revoke, use the Enhanced Life Estate / Lady Bird Deed form.

2. Tenant-for-life warranties (Ala. Code § 35-4-270). Warranties by a life tenant are void as against those in remainder or reversion; no limitation runs against the remainderman until entitled to possession.

3. Contingent remainders (Ala. Code § 35-4-212). Alabama treats what would be a contingent remainder as an executory interest/devise. Draft survivorship/substitution language with care.

4. Recordation tax is value-based (Ala. Code § 40-22-1) — a "no money" family transfer is generally not exempt; tax is computed on value.

5. Medicaid & basis. The remainder transfer starts the 5-year lookback; the retained life estate generally yields a § 1014 step-up via § 2036 inclusion. Confirm with counsel.

6. Legal Counsel. Consultation with a licensed Alabama elder-law/real-estate attorney is recommended.

THIS INSTRUMENT PREPARED BY:

_____________________________________________
Name

_____________________________________________
Address

_____________________________________________
Phone

_____________________________________________
Alabama State Bar Number (if attorney)

SOURCES AND REFERENCES

• Ala. Code § 35-4-2 (estate taken as fee simple unless expressly limited) — https://law.justia.com/codes/alabama/title-35/chapter-4/article-1/section-35-4-2/
• Ala. Code § 35-4-270 (warranties by tenant for life) — https://law.justia.com/codes/alabama/title-35/chapter-4/article-11/section-35-4-270/
• Ala. Code § 35-4-212 (contingent remainder = executory devise) — https://law.justia.com/codes/alabama/title-35/chapter-4/article-8/section-35-4-212/
• Ala. Code § 40-22-1 (recordation tax; value-based) — https://www.revenue.alabama.gov/tax-types/recordation-tax/
• Ala. Code § 35-4-73 (marital status recitation required for recording)
• Ala. Code § 6-10-3 (spousal joinder required for homestead; conveyance void without it)
• IRS, Estate and Gift Tax (Form 709; valuation tables) — https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax
• 26 U.S.C. §§ 2036, 1014, 2501, 2702 (retained life estate inclusion; basis step-up; gift tax; special valuation)

This template is provided for informational purposes only and does not constitute legal advice. Consult with a licensed Alabama attorney before using this form.