What is a Lady Bird Deed?
– Authored by: Collin D. Dickey
You may have heard the term, “Lady Bird Deed,” and wondered what this type of deed does. The Lady Bird Deed got its name when President Lyndon B. Johnson used it to convey property to his wife, Lady Bird Johnson. Today, a Lady Bird Deed is a useful Estate Planning vehicle for transferring property. It may also be known as an “enhanced life estate deed” and allows an individual to retain a life estate in a piece of property, but transfer property outside of probate upon death. What does that all mean? Let’s go through the basics.
A Lady Bird Deed allows you to keep your interest in an asset, such as your home, but also allows that asset to pass to someone else at the time of your death, without involvement of the Probate Court. The use of a Lady Bird Deed is similar in effect to having a named beneficiary of your home. This process involves obtaining the deed to your current home from the county in which it was recorded. That deed is then redrafted and rerecorded as the Lady Bird Deed. Although this new deed has been recorded and reflects the transfer, you retain the ability to control and sell the home during your lifetime.
Aside from avoiding the expenses and time of probate, the Lady Bird Deed has additional planning benefits. For example, while the recipient of property transferred by Land Bird Deed can, of course, be your spouse, your kids, or another family member, the recipient can also be a Trust. The Lady Bird Deed can be used to put the property in a Trust upon the owner’s passing and administered according to the terms of the Trust. Moreover, a Lady Bird Deed gives you the ability to secure your children’s inheritance of your home, without being subjected to divestments associated with Medicaid eligibility.
When considering the benefits and various uses of a Lady Bird Deed, the factual circumstances of your situation should be carefully evaluated. Please contact our office for more information.