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Why is a ladybird deed a good idea?

On Behalf of | Oct 28, 2024 | Firm News | 0 comments

With a ladybird deed, homeowners can maintain full rights to their property during their lifetime, while ensuring it passes to a designated beneficiary upon their death. Sometimes called an enhanced life estate deed, it allows the homeowner (grantor) to sell, mortgage or lease the property without the beneficiary’s consent.

However, after the grantor’s death, the property automatically goes to the chosen beneficiary. This makes it helpful in a variety of ways.

It avoids probate and makes the property transfer more easily

One major advantage of using a ladybird deed is that it enables the property to change hands without going through probate. This can save significant time and money, as the probate process is often lengthy and expensive, sometimes dragging on for months or even years. The beneficiary only needs to file the grantor’s death certificate and sign an affidavit confirming the grantor’s death to take full ownership of the property.

It retains control and flexibility

Because a ladybird deed allows the grantor to keep full control over the property, the grantor also has the freedom to sell it if circumstances change such as needing funds for medical care or wanting to downsize their home. They also have the right to change the beneficiary or revoke the deed entirely.

This flexibility allows the grantor to adapt to changing situations without complicated legal procedures. Whereas with a traditional life estate deed, the grantor would need the future owner’s approval for such actions.

It can be a useful tool in Medicaid planning

Generally, Medicaid eligibility assessments typically do not see property transferred via a ladybird deed as a gift while the grantor is still alive. This is because a ladybird deed doesn’t actually transfer the property until after the grantor’s death. Therefore, it usually does not trigger any gift- or asset transfer-related penalties during the grantor’s lifetime. However, Medicaid rules are complex and can vary, so it’s important to seek the guidance of a knowledgeable professional.

Managing your properties does not have to be complicated

Your property is valuable – both financially and emotionally. A ladybird deed might be a smart way to protect it, but it’s important to get it right. A real estate attorney can help you make the best decision for your future.

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