Transfer-on-Death Deed

TRANSFER-ON-DEATH DEED — NOT AVAILABLE IN ALABAMA

Table of Contents

1. Important Notice
2. Current Alabama Law
3. Alternative Non-Probate Transfer Methods
4. Revocable Living Trust
5. Joint Tenancy with Right of Survivorship
6. Enhanced Life Estate Deed (Lady Bird Deed)
7. Small Estate Procedures
8. Comparison of Alternatives
9. Pending Legislation
10. Sources and References

1. Important Notice

Alabama does not authorize transfer-on-death (TOD) deeds for real property. Unlike many other states, Alabama has not adopted the Uniform Real Property Transfer on Death Act (URPTODA) or any similar statute permitting real property owners to designate beneficiaries through a recorded deed that transfers title upon death outside of probate.

2. Current Alabama Law

Alabama property law does not recognize any deed instrument that transfers real property automatically upon the owner's death without probate. Real property in Alabama must pass through one of the following mechanisms:

• Probate — through a valid last will and testament or intestate succession
• Non-probate ownership structures — joint tenancy with right of survivorship or tenancy by the entirety
• Trust-based transfers — property held in a revocable living trust

3. Alternative Non-Probate Transfer Methods

The following alternatives allow Alabama property owners to transfer real estate outside of probate:

*Requires consent of all owners to sever.

4. Revocable Living Trust

A revocable living trust is the most common alternative to a TOD deed in Alabama for avoiding probate on real property.

Key Features:

• Grantor retains full control during lifetime
• Fully revocable and amendable
• Property must be re-titled in the name of the trust
• Successor trustee manages distribution upon grantor's death
• No court involvement required for transfer to beneficiaries

Requirements:
☐ Trust agreement drafted and executed
☐ Deed transferring property to the trust recorded in the county where the property is located
☐ Trustee designated (typically the grantor during lifetime)
☐ Successor trustee designated for administration upon death or incapacity

5. Joint Tenancy with Right of Survivorship

Key Features:

• Property automatically passes to surviving joint tenant(s) upon death
• No probate required for the transfer
• Each joint tenant has equal ownership interest during lifetime
• Cannot be revoked unilaterally without severing the joint tenancy

Requirements:
☐ Deed must expressly create joint tenancy with right of survivorship
☐ All joint tenants must have equal interests
☐ Deed recorded in the county where the property is located

Cautions:

• Adding a joint tenant constitutes a present gift of an interest in the property
• May have gift tax consequences if the added tenant is not a spouse
• Exposes property to the joint tenant's creditors
• Joint tenant cannot be removed without their consent

6. Enhanced Life Estate Deed (Lady Bird Deed)

Key Features:

• Grantor retains a life estate with enhanced powers (right to sell, mortgage, or revoke)
• Remainder interest passes to designated beneficiaries upon death
• Avoids probate if properly drafted
• Grantor retains full control during lifetime

Considerations:
☐ Consult with Alabama real estate counsel regarding enforceability
☐ Title insurance companies may have varying policies on acceptance
☐ Medicaid estate recovery implications should be evaluated

7. Small Estate Procedures

For estates with limited value, Alabama offers simplified probate procedures:

• Small Estate Affidavit (Ala. Code § 43-2-692): Available for estates valued at $36,450 or less (excluding homestead), after 30 days from date of death
• Summary Distribution: Court may authorize summary distribution for small estates

8. Comparison of Alternatives

For clients who would have used a TOD deed, consider:

9. Pending Legislation

As of the date of this template, there is no pending legislation in Alabama to adopt the Uniform Real Property Transfer on Death Act or to authorize TOD deeds for real property. Practitioners should monitor legislative developments through the Alabama Legislature website.

10. Sources and References

• Alabama Code Title 43 — Wills and Decedents' Estates
• Alabama Code §§ 8-6-140 to 8-6-151 — Uniform Transfer on Death Security Registration Act (securities only)
• Alabama Code § 43-2-692 — Small Estate Affidavit
• Uniform Real Property Transfer on Death Act (not adopted in Alabama)
• Alabama State Bar, Real Property Section — Practice Resources

This document is provided for informational purposes only and does not constitute legal advice. Alabama does not authorize transfer-on-death deeds for real property. Consult a licensed Alabama attorney for guidance on non-probate transfer strategies.