If you’re looking for a flexible and effective way to manage your property in estate planning, the Lady Bird Deed, also known as the Enhanced Life Estate Deed, might be the perfect solution for you. This unique legal tool allows you to retain control over your property while ensuring it smoothly transfers to your beneficiaries upon your passing—without going through probate.

In this newsletter, we’ll explore what the Lady Bird Deed is, why it’s an important estate planning option, how it got its name, and how you can set one up.

What is a Lady Bird Deed?

The Lady Bird Deed (Enhanced Life Estate Deed) is a type of deed that allows you to transfer real estate to your beneficiaries while retaining the right to use and control the property during your lifetime. It’s often used to avoid probate and to ensure a smooth transition of property upon the owner’s death.

With a Lady Bird Deed, you:

• Retain ownership and control of the property during your lifetime.
• Have the flexibility to sell, mortgage, or change the beneficiaries of the property without their permission.
• Automatically transfer the property to your chosen beneficiaries upon your death, avoiding probate.

This flexibility makes the Lady Bird Deed a valuable estate planning tool for individuals who want to keep their options open while still planning for the future.

Why is it Called a Lady Bird Deed?

The origin of the name "Lady Bird Deed" comes from a legal example used by attorney Jerome Ira Solkoff in the 1980s. He used the name Lady Bird Johnson (the wife of former U.S. President Lyndon B. Johnson) as the hypothetical property owner in his explanation. While Lady Bird Johnson had no connection to the deed itself, the name stuck and has become the common term for this type of estate planning tool.

Why is a Lady Bird Deed Important?

A Lady Bird Deed offers several key benefits that make it an attractive option for estate planning:

1. Avoiding Probate: By transferring the property automatically upon death, a Lady Bird Deed bypasses the probate process, saving time and money for your beneficiaries.
2. Retaining Control: Unlike other deeds that immediately transfer ownership, the Lady Bird Deed allows you to remain in control of the property during your lifetime. You can live in, sell, or mortgage the property without anyone else’s approval.
3. Medicaid Planning: A Lady Bird Deed can be a valuable tool for Medicaid planning. Because the property is transferred automatically upon death, it may not count as an asset for Medicaid eligibility purposes. However, state laws vary, so it’s important to consult with an attorney to ensure it’s the right strategy for your situation.
4. Flexibility: You have the ability to change or revoke the deed at any time while you are alive, offering a high level of flexibility if your circumstances or wishes change.

Who Should Consider a Lady Bird Deed?

A Lady Bird Deed may be an ideal solution if you:

• Avoid probate for your real estate
• Maintain control over your property during your lifetime
• Planning for Medicaid eligibility and want to protect your property from being counted as an asset
• Prefer a simple and flexible estate planning tool that allows you to make changes without involving your beneficiaries.

How to Set Up a Lady Bird Deed

Setting up a Lady Bird Deed involves several steps, and it’s essential to work with an experienced estate planning attorney to ensure everything is done correctly. Here’s how the process typically works:

1. Consult an Attorney: Begin by consulting with an estate planning attorney who understands your state’s laws regarding Lady Bird Deeds. They will help determine if this is the right tool for your estate plan based on your goals and circumstances.
2. Draft the Deed: Your attorney will draft the Lady Bird Deed according to your wishes, naming the beneficiaries who will inherit the property after your passing. The deed will also specify that you retain full control and ownership rights during your lifetime.
3. Sign and Notarize the Deed: The Lady Bird Deed must be signed and notarized to be legally valid. Your attorney will ensure that the proper steps are taken to record the deed with the local county recorder’s office.
4. Record the Deed: Once signed and notarized, the deed is recorded with your county’s register of deeds or land records office. This officially puts the deed into effect and ensures that your property will transfer to your chosen beneficiaries when you pass away.

How Rutkowski Law Firm Can Help

At Rutkowski Law Firm, we specialize in creating customized estate plans that align with our client’s goals. Whether you’re considering a Lady Bird Deed to avoid probate, protect your property, or plan for Medicaid, our experienced attorneys can guide you through the process and ensure your estate plan is tailored to meet your needs.

Contact Us Today

If you’re interested in learning more about Lady Bird Deeds or other estate planning tools, we’re here to help. Contact us today to schedule a consultation and find the best strategy for securing your property and legacy.