A lady bird deed (“LBD”) is a type of deed sometimes used to transfer a home to beneficiaries, to be effective upon death of the original owner. It is also called an Enhanced Life Estate Deed because it is a unique type of life estate deed.
Life estate deeds have been used for centuries. A life estate deed consists of two interests—the life estate interest (LEI) and the remainder interest (RI). It is more complex than a TOD designation on an account because both parties own an interest in the real estate. With a traditional life estate deed (TLED), the LEI holder and the RI holder(s) would both have to sign a deed or mortgage.
The difference between a LBD and a TLED is simply that the LEI holder in a LBD has the power to sell or mortgage the property, without the RI holder having to sign. It was created because Medicaid considered a TLED a transfer of assets, but, since the LEI Holder retains certain rights, Medicaid does not consider a LDB to be a transfer of assets.
We hesitate to prepare these deeds in every circumstance. They are safer than joint ownership, and safer than TEIDs, but still, there are concerns:
Attorney Michael A. Pyle, of Pyle, Dellinger & Duz, PLLC, 1655 North Clyde Morris Blvd., Suite 1, Daytona Beach, Florida, 32117 Telephone: 386. 615.9007. E-mail: mikep@pylelegal .com or website: www.pylelegal.com