Alabama Living Trust

Introduction

Key Things to Know

1. 1

   Alabama's sharpest funding trap: Ala. Code Section 6-10-3 voids any deed of the homestead by a married person, including a deed into that person's own revocable living trust, unless the other spouse also signs and gives separately acknowledged assent before an officer authorized to take acknowledgments, in the form prescribed by Section 35-4-29. A single-signature deed from a married Alabama settlor is exposed on the deed itself, not on the trust.

2. 2

   No notary or witness is required to create an Alabama living trust. Ala. Code Section 19-3B-402 requires only settlor capacity, indicated intent, a definite beneficiary, and a trustee with duties to perform, and Section 19-3B-407 will even enforce a purely oral trust on clear and convincing evidence. But once the trust holds Alabama real property, Section 19-3B-1301 requires it to be created by a signed writing, and the deed funding that property into the trust must be attested by one witness unless the grantor's signature is notarized (Sections 35-4-20, 35-4-23).

3. 3

   Amending or revoking an Alabama living trust is stricter than creating one. Ala. Code Section 19-3B-602(c)(2)(B) allows a written revocable trust to be amended or revoked only by a later written instrument delivered to the trustee, cutting off the usual route of revoking by a later will or codicil. A signed amendment left in a drawer, or a later will that purports to redirect trust property, may fail for lack of delivery.

4. 4

   Funding Alabama real estate into the trust means recording the deed with the judge of probate of the county where the land lies, not a county recorder (Ala. Code Section 35-4-50), and paying the Section 40-22-1 deed tax of $.50 per $500 of value, or 0.1%. None of the three exemptions in Section 40-22-1(b) covers a deed funding a living trust, and the tax is assessed on the property's actual value, with a penalty of $100 or 25% of the tax for withholding or falsifying that value (Section 40-22-1(h)).

5. 5

   Whether the Alabama homestead creditor exemption survives once a residence is deeded into a revocable trust is not resolved by any Alabama statute; unlike Arizona, Alabama has no provision expressly preserving it. Separately, the Section 6-10-2 creditor exemption itself is a statutory base of $15,000, adjusted periodically under Section 6-10-12 to a currently published $18,800 (more for a resident 62 or older or with a disability); confirm the current figure with the Alabama State Treasurer before relying on it.

6. 6

   Alabama is a separate property state with no community property regime (Ala. Code Section 30-4-1) and no tenancy by the entirety; dower and curtesy were abolished outright (Section 43-8-57). A couple who moved to Alabama from a community property state should ask an attorney how that property's community character is preserved, since no Alabama statute addresses it.

7. 7

   Alabama rejected the augmented estate: the spousal elective share is measured only against the probate estate under Ala. Code Sections 43-8-70 and 43-8-1(8), so a funded revocable trust generally falls outside it. The same trust remains reachable for the surviving spouse's statutory homestead allowance, exempt property, and family allowance whenever the probate estate is inadequate (Section 19-3B-505(a)(3)), and it gives no protection at all from the settlor's own creditors during life (Section 19-3B-505(a)(1)).

Alabama Requirements for Living Trust

• Alabama Spousal Joinder to Deed the Homestead into the Trust

  Ala. Code Section 6-10-3 voids any deed of the homestead by a married person, including a deed into that person's own revocable trust, unless the other spouse also signs and gives separate, acknowledged assent before an officer authorized to take acknowledgments, in the form prescribed by Section 35-4-29.

• Alabama Amendment and Revocation Delivered to the Trustee

  Ala. Code Section 19-3B-602(c)(2)(B) limits amendment or revocation of a written revocable trust to a later written instrument delivered to the trustee, stricter than the capacity-and-intent standard for creating the trust, and cuts off revocation by a later will or codicil.

• Alabama Funding Deed: Witness or Notarized Acknowledgment, Recorded with the Judge of Probate

  A deed conveying Alabama real property to the trustee must be attested by one witness unless the grantor's signature is acknowledged before a notary instead (Ala. Code Sections 35-4-20, 35-4-23), and is recorded with the judge of probate of the county where the property lies, not a county recorder (Section 35-4-50).

• Alabama Deed Tax on Trust Funding, No Exemption

  Ala. Code Section 40-22-1 imposes a deed tax of $.50 per $500 of the property's value on a deed funding real property into the trust. None of the three exemptions in Section 40-22-1(b) covers a living trust funding deed, and the tax is assessed on the property's actual value.

• Alabama Certificate of Trust

  Ala. Code Section 19-3B-1013 lets the trustee furnish a certification of trust in place of the full instrument to a bank, title company, or other third party, without disclosing the dispositive terms. A recipient who demands the full instrument in bad faith is liable for the trustee's resulting damages under Section 19-3B-1013(h).

• Alabama No Elective Share Reach; Statutory Allowances Do

  Alabama rejected the augmented estate, so the elective share under Ala. Code Section 43-8-70 does not reach a funded revocable trust. The same trust remains reachable for the surviving spouse's statutory homestead allowance, exempt property, and family allowance whenever the probate estate is inadequate (Section 19-3B-505(a)(3)).