Currently, the following states allow Lady Bird Deeds: Florida, Michigan, Texas, Vermont, and West Virginia.
The legend of the Lady Bird Deed
Many believe the origin of the name dates back to President Lyndon B. Johnson, whose lawyers allegedly drafted the first Lady Bird Deed in order to ensure the president's assets were seamlessly transferred to his wife, Claudia Alta “Lady Bird” Johnson.
If there is a conflict between the provisions of a Lady Bird deed and a will, the deed typically takes precedence. This is because the Lady Bird deed transfers property upon the grantor's death without the need for probate, whereas a will does not take effect until after the grantor's death and often requires probate.
Attorney Holley Knapik: Vicky, I can answer that question for you. That is why the enhanced life estate deed that you have is a wonderful tool. You do not need the beneficiary's signature, knowledge, or consent to go forward and sell your home.
History of the Lady Bird Deed
It's a traditional method of transferring property rights that allows the grantor the right to use and control the property until their death, at which point the property transfers to the designated remainderman.
How does a Lady Bird deed affect taxes? A Lady Bird did will not uncap or affect your property tax and does not increase your property's taxable value. The Lady Bird deed does not transfer until the owner's death and therefore, since there is no transfer until death, the property tax is not uncapped.
It's possible to draft and record a ladybird deed without help from an attorney, but that doesn't mean you should. Consider these four pitfalls. Errors can make transfer difficult: One of the disadvantages of a ladybird deed is that mistakes can make it difficult to transfer titles and obtain title insurance.
🏡 Can you name multiple beneficiaries on a Lady Bird Deed? ☝🏼Yes, but it comes with some considerations! 👥 The more people you name, the more complex it can get, especially when it comes to decision-making and potential legal challenges.
Spousal Consent Requirement: “During the lifetimes of both Grantors, this Lady Bird Deed may not be revoked without the written consent of both Grantors. After the death of the first Grantor, the surviving Grantor may unilaterally revoke this deed.”
Legally, upon the death of the grantor, the property seamlessly transfers to the designated grantee. However, if the grantor sells the property before they die, the deed becomes null and void, resulting in no rights for the named grantee.
Risk of Lenders' Claims: The lender may have claims to the property in the event the owner defaults on the mortgage. This could complicate the transfer of the property upon the owner's death. State Law Differences: Different states have varying laws that may affect how a Lady Bird Deed is treated.
He wrote about this type of deed in his estate planning book. He used former President Lyndon B. Johnson and Lady Bird Johnson's names to illustrate his example. The name stuck, and Lady Bird deeds have become a nickname for these enhanced life estate deeds.
Lady Bird deeds allow you to transfer your property to your children upon your death while retaining complete authority to use the property as you choose without your children's consent during your lifetime.
You are not subject to gift tax since the property does not actually transfer title to your beneficiaries during your lifetime. The property will receive a step-up in basis upon your passing, which means it will be valued at the fair market value at the date of your passing.
One of the more unique quitclaim deeds is the enhanced life estate deed, also known as the lady bird deed. These documents are more rare than basic quitclaim deeds, as only five states recognize them. In addition to Florida, lady bird deeds are legal in Texas, West Virginia, Vermont and Michigan.
Control and Retention: Ladybird Deeds allow the original owner to retain rights during their lifetime, whereas Quitclaim Deeds transfer ownership immediately. Title Protection: Ladybird Deeds provide a clearer title upon the owner's death, while Quitclaim Deeds offer no title guarantees.
By contrast, an enhanced life estate deed (the Lady Bird deed) lets you: avoid probate of the property. keep the right to use and profit from the property for your lifetime. keep the right to sell the property at any time.
In the event of the death of a remainderman before the life tenant dies, the remainderman's interest may pass to the deceased remainderman's estate or possibly to the surviving joint remaindermen, depending upon how the joint remainder interests were set up in the will, trust, or deed.
A “Lady Bird Deed” (LBD) is a deed in which the grantor retains a life estate and makes an inter vivos transfer of the remainder interest, while also retaining the ability to revoke or alter the deed without consent of the remainder beneficiary.