The Vault - Questions and Answers

DATE:	12/17/02
SUBJECT/TOPIC:	LIFE ESTATE WITH POWER OF DISPOSITION
	Q:	A deed may reserve a life estate to the grantor. Suppose such a deed additionally reserves in the grantor " . . . the right to revoke this deed during his lifetime, by an instrument of revocation," or says "the grantor may revoke this deed by conveying in his own individual name by deed a full, perfect, and absolute title to the grantee or purchaser of this property, without joinder of remaindermen, pursuant to Tenn. Code Ann. 66-1-106." The above language is taken from the 2002 pocket part to Elder, Law Practice in Tennessee, page 153. However, there is absolutely no comment as to whether this is recognized as valid in Tennessee. I have my doubts about the validity of such a deed. Any thoughts?
	A:	Thanks for your question. I've never seen it done the way Elder suggests. I think I'd try to stay within the strict parameters of TCA 66-1-106. I think I'd convey to a strawman (since the statute speaks of a power being "given" rather than "reserved") and then have the strawman reconvey to the grantor for life with an unlimited power of disposition and with a remainder to whomever. (I'm not sure what the estate and gift tax consequences of such a conveyance would be, but obviously you'll want to check that out.)
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DATE:

12/17/02

SUBJECT/TOPIC:

LIFE ESTATE WITH POWER OF DISPOSITION

A deed may reserve a life estate to the grantor. Suppose such a deed additionally reserves in the grantor " . . . the right to revoke this deed during his lifetime, by an instrument of revocation," or says "the grantor may revoke this deed by conveying in his own individual name by deed a full, perfect, and absolute title to the grantee or purchaser of this property, without joinder of remaindermen, pursuant to Tenn. Code Ann. 66-1-106."

The above language is taken from the 2002 pocket part to Elder, Law Practice in Tennessee, page 153. However, there is absolutely no comment as to whether this is recognized as valid in Tennessee.

I have my doubts about the validity of such a deed. Any thoughts?

Thanks for your question. I've never seen it done the way Elder suggests. I think I'd try to stay within the strict parameters of TCA 66-1-106. I think I'd convey to a strawman (since the statute speaks of a power being "given" rather than "reserved") and then have the strawman reconvey to the grantor for life with an unlimited power of disposition and with a remainder to whomever. (I'm not sure what the estate and gift tax consequences of such a conveyance would be, but obviously you'll want to check that out.)

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