A “Lady Bird deed” is a way to transfer property to someone else outside of probate while retaining a life estate in the property. This type of deed got its nickname when President Lyndon B. Johnson used it to convey property to his wife, Lady Bird Johnson. In Massachusetts, it is more commonly known as an Enhanced Life Estate Deed.
Life Estate Deed With Powers:
One of the purposes of this type of life estate deed is to avoid probate. Retaining powers allows the grantor the power to sell, mortgage, or convey the property as the grantor wishes during his or her lifetime.
Life Estate Deed Without Powers:
This type of life estate deed is often used when planning for Medicaid. With this deed the grantor gives up the power to sell, mortgage, or convey the property to others. Written consent of the remainderman is required. For Medicaid this type of deed is considered a gift and the gift penalty rules apply. The advantage of this type of deed is that after five years the look-back period for Medicaid expires and the value of the life estate will not be considered an asset for Medicaid eligibility purposes.
A Lady Bird Deed:
- Helps to bypass probate of the property
- May provide Medicaid eligibility (5 year look-back)
- Allows the grantor to sell the property and benefit from it during his or her lifetime
- May avoid a gift subject to federal gift tax
An Enhanced Life Estate Deed is a legal document that grants ownership of a parcel of real property (your house, your land) to two separate parties: (1) the Life Tenant, and (2) the Remainderman.
Please contact Monteforte Law, P.C.in the Greater Wilmington, Massachusetts area for more information.