Understanding Ladybird Deeds: Pros, Cons, and Costs

A ladybird deed, also known as an enhanced life estate deed, is a type of deed that allows the owner of a property to transfer ownership to a beneficiary while retaining the right to live on the property for the rest of their life. This means that the owner retains control of the property during their lifetime, but the beneficiary will automatically inherit the property upon the owner’s death.

These deeds are often used as an estate planning tool to keep property in the family without having to go through probate. Probate is a legal process that is used to distribute assets after someone dies. It can be time-consuming and expensive, so ladybird deeds can be a way to avoid these costs.

They are also sometimes used to protect assets from creditors. If the owner of a property has debts, those debts cannot be collected from the property if it is owned by a ladybird deed.

However, there are some disadvantages to ladybird deeds. One is that the owner of the property does not have complete control over the property. They cannot sell or mortgage the property without the beneficiary’s consent. Additionally, if the owner of the property goes into a nursing home or other long-term care facility, the state may be able to claim the property as reimbursement for Medicaid costs.

Ladybird deeds are only available in a few states, including Florida, Texas, Michigan, Vermont, and West Virginia. If you are considering using a ladybird deed, it is important to speak with an estate planning attorney to discuss the specific laws in your state.

Here are some of the advantages of a ladybird deed:

• Avoids probate
• Protects assets from creditors
• Keeps property in the family
• Here are some of the disadvantages of a ladybird deed:
• Owner does not have complete control over the property
• State may claim property as reimbursement for Medicaid costs
• Only available in a few states

If you are considering using a ladybird deed, it is important to weigh the advantages and disadvantages carefully and speak with an estate planning attorney to discuss the specific laws in your state.

The cost to set up a ladybird deed can vary depending on a number of factors, including the complexity of the deed, the attorney’s fees, and the recording fees. However, in general, the cost to set up a ladybird deed is relatively inexpensive.

Here is a breakdown of the costs involved in setting up a ladybird deed:

1. Attorney’s fees: The cost of an attorney’s fees will vary depending on the attorney’s hourly rate and the complexity of the deed. However, in general, the cost of an attorney’s fees to set up a ladybird deed is typically between $200 and $500.
2. Recording fees: The recording fees vary from state to state, but they are typically between $20 and $50.
3. Other costs: There may be other costs associated with setting up a ladybird deed, such as the cost of notarization and the cost of filing the deed with the county recorder.

Overall, the cost to set up a ladybird deed is relatively inexpensive. If you are considering using a ladybird deed, it is important to speak with an estate planning attorney to discuss the specific costs involved in your state.

Here are some additional tips for reducing the cost of setting up a ladybird deed:

• Use a template: There are a number of free and low-cost templates available online that you can use to create your own ladybird deed.
• Do it yourself: If you are comfortable with legal documents, you may be able to do it yourself. However, it is important to make sure that you understand the law in your state before doing this.
• Shop around for an attorney: Get quotes from multiple attorneys before choosing one.