Legal Question in Wills and Trusts in Alabama

Re: real estate

Under Alabama law the "life estate" holder/tenant, is entitled to claim "homestead" on the property if he/she uses the home as their primary residence. Apparently there was a Will that established this life estate, and the "terms" of the Will govern as whom is responsible for taxes and expenses of the property, etc.

If not, then it is most likely advantageous for the family as a whole, for the life tenant to claim their homestead and pay these taxes as that will result in the lowest tax bill.

However, please keep in mind, that under Alabama law, each co-owner is responsible for maintaining their own insurance against loss of their property. In other words, unless the terms of the Will provide otherwise, if the home where to burn down, and the life tenant has all the insurance on the property in his or her name alone, then in that case, the insurance monies are theirs alone, and if the 2 sisters don't have their own coverage, then that portion of their inheritance could be lost forever.

Best practice, again assuming the Will did not impose any obligation on the life tenant to maintain insurance coverage, is to get together with the life estate holder, and perhaps by agreeing to help with a portion of the insurance premiums, to get the 2 sisters' names (referred to as the remainderman's interest in the property), added to that insurance policy as "additional insureds".

Hope this is helpful, and if we can be of further assistance, please give us a call. Have a blessed rest of the Lord's Day and coming week. Kindest regards, Chip

Re: real estate

Usually life estates have an agreement where the life estate holder/resident pays all taxes, maintenance and insurance. However, all things are negotiable, so look for an agreement that details who is responsible. If no agreement exists, the life estate owner is responsible.

William G. Nolan

www.NolanElderLaw.com