Personal Property Trusts in Alabama
A personal property trust is a revocable trust used to hold title to things other than your home — vehicles, boats, equipment, an LLC membership interest, sometimes a rental property. People use them for privacy and for keeping titled assets out of probate. They are legitimate and useful. They are also routinely oversold, so this page says what they do not do as clearly as what they do.
Why privacy is the real argument
A will becomes a public record when it is admitted to probate. Anyone can walk into the probate office and read what you owned and who received it.
A trust does not work that way, and Alabama makes that stronger than many states: Alabama has no trust registry. The Alabama Uniform Trust Code, § 19-3B-101 and following, contains no requirement that a trust be filed or registered anywhere. Nobody indexes it. The trust document stays between you, your trustee and your beneficiaries.
That is a genuine benefit if your reason for planning is that you would rather your neighbours, your competitors, or a beneficiary’s ex-spouse not be able to read the arrangements.
A revocable trust does not protect your assets from your creditors. Section 19-3B-505(a) says it directly: during the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors. And after death, property in a trust that was revocable immediately before death remains reachable for creditor claims, administration costs, funeral expenses and the family allowances, where the probate estate cannot cover them. If someone is selling you a revocable trust as asset protection, they are describing a different product.
What it is actually good for
| Use | Does it work? | Why |
|---|---|---|
| Keeping ownership off the public record | Yes | No Alabama trust registry. The trust is not filed. |
| Avoiding probate on titled personal property | Yes | Property properly transferred into the trust passes under the trust, not through the estate. |
| Holding an LLC membership interest privately | Yes | Common where the member does not want their name in every search. |
| Managing assets if you become incapacitated | Yes | A successor trustee steps in without a court proceeding. |
| Protecting assets from your own creditors | No | § 19-3B-505(a). Revocable means reachable. |
| Medicaid planning | No | A revocable trust is a countable resource. That analysis needs an irrevocable trust and a much longer conversation. |
| Reducing income or estate tax | No | A revocable trust is tax-neutral during your life. Ask your CPA about anything tax-driven. |
It only works if you actually transfer the property
This is where these fail, and it fails quietly. A trust controls only what has been put into it. A signed trust document with nothing transferred is an empty container.
- Vehicles and boatsRetitled with the licensing official. Check how your insurer wants the policy written before you move a title — a mismatch between the titled owner and the named insured causes problems at exactly the wrong moment.
- LLC membership interestsAssigned by a written assignment, and the operating agreement has to permit it. Many do not without consent of the other members.
- Bank and brokerage accountsRetitled in the name of the trust, with the institution’s own paperwork.
- Real propertyBy deed. And the deed has to be recorded — an unrecorded deed does not move the property into the trust. If you are married and it is the homestead, § 6-10-3 requires the other spouse’s signature and assent whether or not they are on the title.
- Everything elseA general assignment of personal property covers untitled items — furniture, tools, collections — but titled assets need their own transfer.
Most firms that sell trusts send the deed work out. We prepare deeds every week, so the transfer into your trust is drafted in this office. One caution that applies to every deed we prepare: you record it, not us. That matters more here than usual, because an unrecorded deed does not move the property into the trust, and a trust that does not hold the property does not avoid probate on it.
When you probably do not need one
If your titled property is a car and a truck, both of modest value, and your estate would qualify under the Revised Alabama Small Estates Act, the trust is likely more machinery than the situation calls for. We will say so.
The cases where it earns its cost tend to involve a business interest, property you would rather not have publicly associated with your name, a beneficiary situation that needs managing, or a family that genuinely values privacy for its own sake.
Limestone, Madison, Morgan, Lauderdale, Colbert, Franklin and Lawrence Counties. Filing fees and local practice differ from one probate office to the next.
The first question is what you own and how it is titled.
Bring the titles, or a list. Half the time the answer is that a simpler document does the job.
Questions we get asked
Is a personal property trust public record in Alabama?
No. Alabama has no trust registry — the Alabama Uniform Trust Code contains no filing or registration requirement. A will, by contrast, becomes a public record once admitted to probate. That privacy difference is the main reason people use these.
Does it protect my assets from creditors?
A revocable one does not. Ala. Code § 19-3B-505(a) provides that during the settlor’s lifetime, property of a revocable trust is subject to the settlor’s creditors, and after death it remains reachable for creditor claims and administration costs where the probate estate is inadequate. Asset protection requires an irrevocable structure and a different conversation.
Can I put my car in a trust?
Yes, by retitling it with the licensing official. Check with your insurer first about how the policy should be written — a mismatch between the titled owner and the named insured is a problem you do not want to find after a collision.
Can I put my LLC interest in it?
Usually, by written assignment — but the operating agreement controls. Many require the consent of the other members before an interest can be transferred, including to a trust.
Is the trust revocable?
Under § 19-3B-602(a), a trust is revocable unless its terms expressly provide that it is irrevocable. Alabama’s default is the opposite of the older rule, so the document should say plainly which one you have.
Does it help with Medicaid?
No. A revocable trust is a countable resource for Medicaid purposes. Medicaid planning requires an irrevocable structure, involves look-back periods, and should not be attempted from a website.
What happens if I never transfer anything into it?
Nothing. The trust controls only what was actually put into it. Everything left outside passes under your will, through probate. Unfunded trusts are the most common way this planning fails.
Privacy is a real reason. Asset protection is not.
If privacy and probate avoidance on titled property are what you are after, this works. If you are trying to put assets beyond creditors, say so at the start and we will tell you honestly whether anything we can draft would do it.
Daniel Shawn Pickens
Daniel S. Pickens Law · 300 West Green Street, Athens, Alabama 35611 · 256-434-1678. Office hours Monday to Friday, 8:00 a.m. to 4:30 p.m.; phones answered 24/7.