What is a Lady Bird Deed?
A Lady Bird Deed is a type of deed that allows the owner of a property to transfer ownership to a beneficiary while retaining the right to live on the property for the rest of their life. This type of deed is named after Lady Bird Johnson, who used it to transfer ownership of her home to her husband, President Lyndon B. Johnson.
Lady Bird Deeds are often used to avoid probate, which is the legal process of transferring ownership of property after someone dies. Probate can be a long and expensive process, and Lady Bird Deeds can help to avoid these costs.
Lady Bird Deeds can also be used to protect a home from Medicaid estate recovery. Medicaid is a government program that provides health insurance to low-income individuals and families. When someone receives Medicaid benefits, the government may be able to recover the cost of those benefits from the person’s estate after they die. However, if the person owns a home and has transferred ownership to a beneficiary through a Lady Bird Deed, the government may not be able to recover the cost of Medicaid benefits from the home.
There are some drawbacks to using Lady Bird Deeds. One drawback is that the owner of the property must continue to pay property taxes and maintain the property. Another drawback is that the beneficiary of the deed may not be able to sell the property without the consent of the owner.
Overall, Lady Bird Deeds can be a useful tool for estate planning. However, it is important to consult with an attorney to discuss whether a Lady Bird Deed is right for you.
Here are some of the benefits of using a Lady Bird Deed:
- Avoid probate
- Protect your home from Medicaid estate recovery
- Keep control of your home during your lifetime
- Transfer ownership of your home to your loved ones
Here are some of the drawbacks of using a Lady Bird Deed:
- You must continue to pay property taxes and maintain the property
- The beneficiary of the deed may not be able to sell the property without your consent
- You may lose your homestead exemption
- You may have to pay gift taxes
If you are considering using a Lady Bird Deed, it is important to consult with an attorney to discuss your specific situation.