Lady Bird Deeds (Enhanced Life Estate Deed)

An enhanced life estate deed is simply a life estate deed with the grantor retaining more rights and powers than he normally would.

For example, a typical life estate deed is where the person who owns a house wishes to give their house to someone else, (usually their son or daughter), to avoid probate.

The homeowner signs a deed giving away the property but retains the right to live in the house until they die. When the homeowner passes away the title automatically passes to the son or daughter. The downside is that, once the deed is signed, the right to live there is the only right the homeowner retains. He can’t sell the house, or mortgage it, or take equity out of it, without the permission of the son or daughter, who are called the remaindermen. Most people are very uncomfortable giving up all of their home ownership rights in this manner.

The Lady Bird deed, which is only legal in five states, solves this problem.

It is not the perfect solution for everyone.

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