Lady Bird Deed Form

Estate planning can be complicated. Settling the estate through probate can take ages and cause a financial burden on your loved ones. The Lady Bird deed offers a simple solution where a property is automatically transferred to a chosen beneficiary without going through probate.

If you want to transfer assets to anyone after your death while keeping full ownership rights during your lifetime, this is the document you need. When prepared right, a ladybird helps save time, costs, and potential complications after death (especially for your natural heirs or chosen beneficiaries).

If you are here to get started quickly, you can use our free Lady Bird Deed template as a starting point. It gives you a structured layout for the property details, the current owner, and the beneficiary you want to name, along with the wording that keeps your ownership rights in place during your lifetime. The file is editable, so you can adjust the phrasing and formatting to match your state’s rules and the exact way you want the transfer to work.

What Makes LBDs So Special?

The main feature of an LBD is the enhanced power the grantor still has to sell, rent, mortgage, or otherwise use or access the property without the grantee’s consent. The remainderman or beneficiary only gets these rights upon the death of the grantor, and that too, only if:

• The grantor still owns the property at the time of death
• The deed hasn’t been revoked
• The grantor hasn’t sold or gifted the property to another party at any point after signing the deed, and while mentally competent

Comparison with a traditional life estate deed

In traditional LEDs, the life tenant (or the grantor) can live in and use the property, but can’t sell or mortgage it without the grantee’s consent (legally known as a joinder). LBDs luckily do away with these limitations to the grantor’s rights!

Common Use Case

LBDs are often used in conjunction with wills & revocable trust. They offer several benefits for both parties, such as tax savings, eligibility for Medicaid, and protection from creditors. Before diving into the nitty-gritty of how a Lady Bird Deed is drafted and completed, let’s explore these key advantages.

Protection from Tax Increases during the Grantor’s Lifetime

In states like Florida, Texas, or Michigan, property taxes are limited by a “homestead cap”. For those who don’t know, a homestead is your main home or place of residence. A cap means your taxes are calculated using the assessed value of your home, which only rises by a small percentage each year, even if market value goes up much faster!

Now, if you sell or gift your home to someone while you’re still alive, that counts as a change of ownership, calling for a reassessment of the home’s value—resulting in (sometimes) steep tax increases for you!

Let’s say Sally owns a home in Florida, priced at a market value of $400,000. But thanks to a homestead cap, it’s only taxed on $250,000. After she dies, she wants her daughter to inherit the home, but she’s worried that if she transfers title, the county will see this as a change in ownership, and the home value will be reassessed, and her taxes will go up immediately while she’s still alive. 

The solution to this is signing a Lady Bird Deed. This way, the county does not reassess the property during her lifetime, and the homestead cap remains.

Medicaid Benefits

Being able to qualify for Medicaid is a common reason why people convey properties using LBDs. 

Medicaid programs typically have strict rules about asset transfers. When you apply for Medicaid, they take a look at both the value of your assets and any gifts or transfers made in the last 5 years at less than fair market value.

If you transfer a property using a traditional life estate deed, Medicaid sees this as a transfer of assets for less than fair market value. Because of that, Medicaid can treat you as having too many assets or impose a penalty before you can qualify for the benefits.

But if the transfer is done via a Lady Bird Deed, you haven’t truly given away anything, as the transfer only takes effect at death. Medicaid doesn’t count this as a transfer, and you may still qualify or avoid penalties.

Do LBDs protect Grantees from a future medicaid estate recovery claim?

Let’s say someone who received nursing care passes away with real property to his name. When this happens, the state has the power to file a Medicaid Estate Recovery Claim to recover the cost of those benefits during the probate process from the value of the home, before said property is passed to their heirs.

But luckily, since LBDs allow property to transfer or pass outside probate, named heirs or beneficiaries are not subject to Medicaid Estate Recovery, at least under current law. 

Protection from Creditors

A quiet strength of LBDs is the added protection they offer against creditor claims against the grantee. Because the grantee’s interest doesn’t truly transfer until the grantor dies, they legally own nothing yet. That means their creditors can’t place liens or claims on the transferred property while the grantor lives.

That being said, LDBs do NOT shield your property from all types of credit claims or government penalties. For example:

• Any debts, judgments, or bankruptcies attached to the property during the time it was owned by the grantor will transfer to the grantee after the grantor’s death
• Any IRS tax liens or state tax liens already tied to the property must be settled before the property can be fully transferred to the beneficiary.

Homestead protection

Since the grantor still owns the property outright, with the unrestricted right to sell, mortgage, change beneficiaries, etc., even after the deed is signed, it’s often treated as their homestead (or primary place of residence). 

The good news is that LBDs allow a homestead to retain its protected status from creditors. So if a grantor faces financial troubles or gets sued, creditors can’t force them to sell the property since it’s protected as their homestead property.

What is Probate?

The legal process of administering and transferring a dead person’s estate after clearing the outstanding debts or liens on the property that they may have accrued during their lifetime. Only when these are paid can the estate be distributed to the named beneficiaries. Each beneficiary is granted a particular share or interest as per the owner’s registered will or any other statement, trust policy, contractual agreement, etc.

Lady Bird Deed Template

Our Lady Bird Deed Template is a comprehensive and legally compliant deed form that you can use for drafting a deed with full confidence. It is available in multiple formats: DOCX, Google Docs, and ODT, and can be easily edited. 

It covers all possibilities like multiple beneficiaries and allows you to indicate the state jurisdiction, property description, and details of the grantor and grantee. 

How to use the Lady Bird Deed Template

Here’s a quick, practical guide on how to complete a premade LBD template like ours!

• Date and Location: Specify when and where the deed is signed. This information is crucial for official documentation and registration purposes. Pinning down the relevant county and state also clarifies which court has jurisdiction if a dispute arises in the future.
• Grantor/Grantee Details: Supply the full names and complete postal addresses of both parties to ensure there is no confusion about who is transferring the property to whom. Make sure names match precisely with the deed you received when you became an owner of the property. 

• Property Description: Add a legal description of the property. This includes the property’s postal address, zip code, bounds & metes description, geographical coordinates, and any supporting documentation such as site or survey maps.  Note: Both parties should make sure the description included in the deed matches the deed originally granting the property to the transferor.

What If There Are Multiple Beneficiaries

A grantor can transfer the property to as many beneficiaries as they wish. But the deed must clearly specify how the interest of each beneficiary will be held or distributed. You can choose  two options in the template:

Tenants in common

If two people co-own a property, with each having a specified share, say, 60/40 or 30/70 per cent, each beneficiary can sell, rent, or mortgage their share without the others’ consent. If one of the owners dies, their shares pass on to their legal heirs or assignees and not the other beneficiaries.

Joint tenants with rights of survivorship

All the beneficiaries own the property together as a whole; no one can own 60% while another owns 40%. That also means any decision to sell, rent, or mortgage the property will require the signed consent of all the named beneficiaries. 

Right of Survivorship: If one beneficiary dies before the other, the property automatically passes to the other beneficiary(ies)—again, without going through probate. Be aware that, in divorce cases, a court could rule on the property’s division regardless of the survivorship clause and treat the property as jointly owned.

The other option

You’d be surprised how many ways there are of co-owning a piece of land. For example, you can:

• Place the property in a revocable or irrevocable trust, naming yourself or others as trustees and beneficiaries
• Own a property via a business partnership (general or limited), to be governed by a business contract, not a will
• Form a limited liability company (LLC) or corporation to own real estate and divide ownership by shares

• Signatures: Have the document signed by the grantor and witnesses (if applicable). Check local laws to determine if witness signatures are required, and if so, how many—usually one or two.

• Notarization: Both the grantor and witnesses must sign the deed in the presence of a Notary Public, who shall verify their identities, consent, and soundness of mind before adding their official stamp, seal, and signature to the document.

Section for Recorder’s Use Only

Once a deed is signed and notarized, it must be filed with the local county clerk’s or land registrar’s office for recording. 

The recorder should carefully fill out these sections in the deed form template to specify:

• Who prepared the recording? This is usually the seller or buyer’s lawyer or a real estate agent.
• Where to send the deed once stamped & imaged? Typically, this is the buyer, their lawyer or real estate agent, or a lender.
• Where will tax bills be sent from this point on? All tax bills, valuation notices, and assessments are sent here, addressing the person or entity responsible for paying taxes (usually the grantee or buyer).
• Parcel Number: Unique to each property, this number is listed on the property’s tax bill or statement. Double-check with your local taxing authority to make sure each digit is accurate, as they often indicate the subdivision, block, and lot, which help officials locate & trace the property.

Limited State Coverage

Despite their benefits, LBDs are only recognized in five states: Florida, Michigan, Texas, Vermont, and West Virginia. Title insurance companies in these states are generally willing to insure a title passing through a Lady Bird deed. In most other states, the deed is likely to result in an uninsurable title, reducing the value of the property. So if you’re in any other state, you should not assume a Lady Bird Deed will work or be insured.

In other states, such as Wyoming, North Dakota, South Dakota, Kansas, Missouri, Arizona, Arkansas, Ohio, Oklahoma, ladybird deeds may be allowed even though not recognized by statute.

In most U.S. states, a transfer on death (TOD) or beneficiary deed is used, which is similar to, and may be preferable to, a Lady Bird deed. Regardless of where you own the property, make sure the deed complies with relevant local laws so it holds up in court.

Frequently Asked Questions