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Health & Fitness

What in the world are Lady Bird Deeds?

Simply, a lady bird deed is an inexpensive way to avoid probate and is similar to naming a beneficiary for a person's real estate upon death. It has its background from President Johnson who after leaving office and retiring to his ranch in Texas deeded his lands with a transfer on death provision to his heirs. President Johnson and Lady Bird Johnson (the deed's namesake) desired to retain total control over the ranch and for their heirs to inherit the ranch without probate -- but not before President Johnson and Lady Bird passed away. 

Many states recognize some form of the Lady Bird Deed including the State of Michigan by Land Title Standard 9.3.

The unique features of a Lady Bird Deed are that the person making the gift retains an "enhanced life estate" in the real estate which permits him or her to continue to live in the home, sell it, and even mortgage or pledge the property. The Grantor of the Lady Bird Deed can even cancel the Lady Bird Deed without any permission or consent of the remainder-person.

Lady Bird Deeds are wonderful documents to use for Medicaid qualification purposes --especially if the property being transferred is the home. 

The attorneys at Kelly & Kelly are skilled in the use of Lady Bird Deeds and its application for securing a "step-up" in basis for federal estate tax purposes and in ways to avoid "uncapping" the taxable value of property for real estate tax purposes.

This is an exciting new trend that has wide spread application in estate planning, wills, trusts and real estate. Contact us and let us show you how a Lady Bird Deed can be implemented in your estate plan.

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