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What Is a Lady Bird Deed?

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What Is a Lady Bird Deed?

A lady bird deed is a type legal document that allows a person to transfer their real estate upon their death to another person, without going through the probate system. This can be advantageous, as the probate system can often take while to complete and may lead to distributions that might not be in line with the deceased person’s actual intentions.

Also called “enhanced life estate deeds,” lady bird deeds are different from regular life estate deeds that are used to transfer property upon the person’s death. They are not available in all states and may be subject to various restrictions and limitations, depending on the jurisdiction.

What Are Some Benefits of Lady Bird Deeds?

With a standard life estate deed, the homeowner names a beneficiary to inherit the property upon their death. The homeowner retains ownership of the property upon death, but subject to various restrictions. For instance, they cannot sell the property or mortgage it. In contrast, lady bird deeds have benefits such as:

  • Transfer of the property upon death while avoiding the probate process
  • Rights to use the property and collect profits on it for the remainder of the person’s lifetime
  • Rights to sell the property at any time desired
  • Transfer the property without being subject to federal gift tax requirements
  • Retain eligibility for Medicaid benefits

This last feature is one of the main reasons why people, especially elderly persons, are often interested in lady bird deeds. Applicants for Medicaid may have their application rejected if they have transferred within a period of five years prior to the application. However, with a lady bird deed, the person still retains control of their property, and thus they can still qualify for Medicaid benefits.

What If I Have a Dispute Over a Lady Bird Deed?

While lady bird deeds can be very beneficial for both the property owner and the beneficiary recipient, they can also be associated with certain types of legal disputes. For instance, there may be disputes regarding the actual recipient of the property. This usually occurs if the property owner used vague or ambiguous language in their deed document, such as “transferring property to my son.” To avoid such estate property disputes, the property owner needs to use very clear language when referring to beneficiaries in their documents.

Also, as mentioned above, lady bird deeds are not allowed in all states. They are commonly used in Texas and Florida. In other states, it may be necessary to consult with a lawyer to determine whether such deeds are allowed. Violations or legal disputes over a lady bird deed are often remedied through a monetary damages award to compensate for a breach or illegal action.

Should I Hire a Lawyer for Help with a Lady Bird Deed?

Lady bird deeds are highly specific documents that require a substantial amount of legal guidance in order to complete. You may wish to hire an estate lawyer in your area if you need help drafting, reviewing, or editing a lady bird deed. Your attorney can research the laws in your area to determine which type of deed document is right for you. Also, if you need to file a lawsuit or go to court regarding a lady bird deed, your lawyer can represent you during the formal legal proceedings. 

Photo of page author Jose Rivera

, LegalMatch Legal Writer

Last Modified: 02-04-2015 12:08 PM PST

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