Lady Bird Deeds
Fearful of losing a homestead due to Medicaid Estate recovery? We may have the answer.
LADY BIRD DEEDS
Why use an attorney and not a form which I can obtain online?
In our experience, lay persons do not typically possess the type of knowledge required to know how to properly prepare these Deeds, let alone whether it is appropriate or desirable in a particular circumstance. If done incorrectly, these deeds can create more problems than they solve. That is why we review all the information and documents listed below before preparing a Lady Bird Deed. Your home is a valuable asset and should be treated as such.
What will I have to provide the attorney?
- the Deed from which the Grantor(s) claim their title;
- the names and addresses of the Grantor(s) and Grantee(s), as well as their marital status;
- the Last Will and Testament of the Grantor(s);
- copies of any recorded Liens affecting the real property;
- the latest appraisal or annual tax valuation on the property; and
- if any of the Grantors will be signing by Power of Attorney, then the original Power of Attorney, if not previously recorded in the county where the real property sits, or a copy if previously recorded in such county.
How are Lady Bird Deeds used?
A Lady Bird Deed is a type of a deed which transfers title subject to an enhanced life estate retained by the Grantor. The life estate is considered to be enhanced because the holder of the life estate is granted extraordinary powers. For example, the Life Tenant has the power to transfer the property during his or her lifetime to someone other than the Grantee(s) without the joinder or consent of the Grantee(s). Because of this feature, a Lady Bird Deed is a means of transferring a homestead such that it should not be subject to estate recovery by the State of Texas. That said, it is possible that this interpretation could be changed by the State at any time and, if this happened, then this deed could be rendered ineffectual for the purpose of avoiding estate recovery.
Another advantage of using this Deed is that a probate of the Will is not required to transfer the property upon the death of the Grantor. There may be other reasons for a probate, but this piece of real property should not be one of them, unless required by a title company. If desired, we can also assist with positioning the Estate to avoid probate altogether.
For married couples, we recommend that the institutionalized spouse’s interest be transferred to the community spouse prior to execution of a Lady Bird Deed. If this is your situation, then additional fees and legal services will be required.