Ladybird deed- What is it?

  • Creates a life estate for the Grantor
  • Grantor can sell, lease, mortgage etc.
  • Grantor can revoke deed
  • On death, the property is conveyed to named Grantees

Ladybird deed-What are the benefits?

  • Avoids Probate
  • Avoids Medicaid recovery
  • The easiest and cheapest way to convey property at death
  • Part of the least expensive estate plan possible

Ladybird deed versus Quit Claim deed naming joint owners

  • Joint owners must all sign deed to sell property. Any one joint owner can refuse to sign and stop a sale.
  • If joint owner files bankruptcy, the bankruptcy court can file a lien on property
  • If joint owner files for divorce, the property is part of the property settlement
  • If joint owner is sued and loses, the judgment creditor can attach a lien to the property

Ladybird deed-What is the downside?

  • One major bank in the area will not refinance a mortgage if there is a ladybird deed in place. They require a deed back to grantors, then sign the refinance papers, then do a new ladybird deed.
  • Beneficiaries on the deed must agree when it is time to sell the house.