Lady Bird deeds are an enhanced life estate deed that’s only available in a handful of states. With a traditional life estate deed, your parents would reserve their right to live on their property for the rest of their life and then the property goes to the beneficiary, but they cannot sell or mortgage the property without the beneficiary’s/beneficiaries’ permission.
An enhanced life estate deed permits them to sell or mortgage the property if they choose. If they want their home to go to their children, but they need the money now and decide to sell, they have every right to do so. The goal is to avoid probate.
Understanding Probate
Probate involves the courts. It’s a process in which assets are handled and distributed following a death. If there’s a will, the court follows the rules set forth in the will. If there is no will, the state decides how to distribute assets. Often, the courts follow guidelines of spouse first, children second, parents third, siblings fourth, etc.
That can be problematic if your parent never actually divorced a spouse prior to his or her death or disowned a child for one reason or another. Someone who shouldn’t get any of your parents’ estate may suddenly get a large portion of it. That leads to arguments and challenges.
It may seem simple, but probate can take years if there are issues. It’s also expensive to go into probate. By making sure there is legal paperwork in place, your parents make sure their assets go to the people they want to have them. This is why people start looking into a Lady Bird deed. Most states do not accept a Lady Bird deed, however, so it’s not always a viable option.
What is the Legal Alternative?
What do you do if your state doesn’t have a Lady Bird deed? Look into a revocable living trust with a reputable elder law attorney.
This estate planning measure allows your parents to continue managing their assets as they see fit. If they become incapacitated, someone will manage their assets in a manner your parents would want. When your parents die, their assets would then transfer to beneficiaries as they’ve requested. If they need to change their trust at any point, “revocable” ensures they can.
Not every state uses the Lady Bird deed, but that doesn’t mean you can’t protect your parents’ estate. A revocable living trust is a popular choice when it comes to avoiding probate. Talk to an elder care attorney about estate planning measures that protect your parents’ assets and ease stress and uncertainty.
If you or a loved need assistance with Asset Protection in Pelham, AL contact Nolan Elder Law & Estate Planning today. (205) 390-0101