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.