A Lady Bird deed, also called an enhanced life estate deed or reservation of a life estate with a general power of appointment, is a useful estate planning tool. Any real property in Texas can be transferred by LBD. Use of Deeds.com Legal Forms. Instead, it is Texas case law that governs the interpretation of LBDs, and there are actually very few cases on this topic. As noted above, the execution and filing of a LBD is not considered a transfer for Medicaid purposes. Like any other deed, a LBD must be executed by the grantor, and recorded in the deed records in the county where the property is located. Like any deed, it must be prepared, signed, and recorded in the county records office. The grantor has no obligation to obtain permission of the remaindermen to take any of these actions and does not have an obligation to account to them for any income the grantor receives. In a standard deed, Person A has full ownership of real property. According to popular folklore, U.S. President Lyndon Johnson once made use of this deed to transfer some property to his wife Claudia "Lady Bird" Johnson. A LBD is simply a deed that includes the designation of remaindermen and reservation of the life estate and enhanced rights to the grantor. Additionally, because property passing through LBD is not considered part of the decedent’s probate estate, it is not subject to Medicaid Estate Recovery, at least under current law. Texas Real Estate. Additionally, as noted above, a LBD could potentially trigger a due-on-sale/transfer clause in a mortgage, which could certainly cause unintended consequences for the grantor. It may be in the form of a general warranty deed, special warranty deed, or a deed with no warranty. Image by pixel2013 from Pixabay What is a LBD? A Texas lady bird deed form combines a traditional life estate deed with a retained power to sell, convey, or mortgage the real estate without the remainder beneficiary’s consent. A lady bird deed also comes into play when a client’s family is dealing with Medicaid recovery. By executing a LBD, the property at issue is no longer considered part of the grantor’s probate estate, meaning that property subject to a LBD should avoid Medicaid Estate Recovery, at least under current law. Corporate Forms (12) Estate Planning Forms (8) Probate Forms (7) Real Estate Forms (33) Description Additional information Description. The Lady Bird Deed Also known as the Enhanced Life Estate Deed, the Lady Bird Deed was designed to help pass property on from one individual to the next, outside of probate. A lady bird (ladybird) deed (also called an enhanced life estate deed, lady bird trust or a transfer on death deed) is a type of life estate deed. It took 5 or 6 times due to different errors to finally achieve the qualified version. Because the property remains part of the grantor’s estate, the property does receive a stepped up basis adjustment at the death of the grantor. Once the owner dies, the property is transferred automatically to new owners without the need for probate. The LBD grantor has the right to revoke the LBD either by filing a revocation document or by filing a subsequent conflicting LBD. I saved about $200 using deeds.com. Lady Bird Deed This Deed is made on this day of _____, 20__, between the Grantor _____ of address _____ and the Grantee Beneficiary _____ of address _____. Enhanced Life Estate Deed (Lady Bird Deed) quantity. Additionally, the LBD allows the grantor to retain all control, including the right to sell, gift or otherwise transfer the property. I received quick responses pointing out specific problem, which was very helpful for me to correct the mistake. The LBD grantor retains the right to take back the property, a LBD should not be considered a transfer for purposes of the Medicaid transfer penalty. Creating a Texas Lady Bird Deed. Deeds.com Texas Enhanced Life Estate Deed Forms Have Been Updated as Recently as Monday January 11, 2021. What action must be taken by the remainderman at the grantor’s death? This is a key distinction between LBDs and transfer on death deeds. What is a LBD? This is different than the case of a transfer on death deed, because there the actual transfer does not occur until the death, whereas here, the remainder interest is granted upon execution of the LBD. A Lady Bird Deed is the standard method in Texas to solve this problem. Michael Lucksinger is a Texas licensed attorney and CPA. My document was recorded in less then 24 hours! Use of any Do It Yourself Legal Form from our website is done so AT YOUR OWN RISK. MERP is how the state of Texas attempts to recapture funds from a decedent that were paid for their care through the Medicaid program. The key benefit of a LBD and purpose for which they were created was to assist with Medicaid planning. 38. th. A Lady Bird deed, also called an enhanced life estate deed or reservation of a life estate with a general power of appointment, is a useful estate planning tool. Patrick P. said: Great service! Related Post: The Advantages and Disadvantages of Lady Bird Deeds. July 7-9, 2016 . What must be included in a LBD? Richard V. said: It was very easy to get the documents which I needed. As you can read, we believe you should consider language in the reservation to the Grantor, a statement that the Grantor may convey the property “without joinder by the remaindermen”. Thanks! Product Categories. Amazing! A Lady Bird deed form contains a provision to the effect that the life estate is "coupled with an unrestricted power to convey during the Grantor's lifetime." I will be using deeds.com from now on. According to Texas Tech law professor Gerry Beyer, the Florida lawyer who created the deed in the 1980s used the names of the Johnson family in an example showing how the deed worked—and the name stuck. Add to cart. In simple terms, a life estate is a form of co-ownership in a piece of property, and a deed is a document that legally transfers the property from one owner to another. A LBD is a deed that transfers a person’s (the “grantor”) interest to another (the “remainderman”) but reserves a life estate in favor of the grantor. The sample form really helped. 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