How Much Does a Lady Bird Deed Cost?
If you’re looking for ways to avoid probate for your house, then you may come across something known as a “Lady Bird” deed or also known as an enhanced life estate deed. This name came from the Lyndon B. Johnson era when President Johnson deeded his property to his wife, Lady Bid Johnson.
This method offers a simple, inexpensive way to transfer your real estate after your death without going through probate.
This deed, as per Nolo.com, is often ideal for those who think they may need Medicaid in the future as it will help preserve your eligibility and home because, without it, the state could take your home to repay the Medicaid benefits you received throughout your life.
While the deed may sound great for your circumstances, do keep in mind that is available in a limited number of states: Florida, Michigan and Texas as of 2018.
How much does it cost to get a Lady Bird deed?
The cost of a Lady Bird deed will greatly vary depending on your circumstances/complexity, the lawyer you work with and where you live. Some attorneys, for example, may draft a Lady Bird deed for a flat fee, whereas another attorney may charge based on your circumstances. From what we researched, however, the costs could greatly vary as with any attorney-related fees, but for the most part, be prepared to spend anywhere from $150 to $350 plus the recording fees, which, depending on the state you live in, can be an additional $xx.
Sabina Tomshinsky, a tenant lawyer based in Gainesville, Florida, stated the costs could range anywhere from $100 to $200 plus the recording fee and other miscellaneous costs on Avvo.com. Another lawyer who replied stated anyone who is interested in this type of deed should call a few property or real estate attorneys in their area to see what their fees are, but be prepared to have varying answers as there is no “set” pricing structure.
What is a Lady Bird deed?
A Lady Bird deed is a way to transfer your ownership to someone else outside of probate while still retaining your life inside your home. But unlike a regular estate, this type of deed allows you to have the power to retain control of your property throughout your life, including the rights to profit from and sell at any time you wish. This type of deed is beneficial in a few ways. For starters, if you wanted to apply for Medicaid, an applicant cannot transfer property within five years of the application, but in the case of a Lady Bird deed, you can retain control of your property and it may not count as an asset for Medicaid eligibility in some states. In some circumstances, it can also help avoid estate recovery as the state will no longer be able to file a claim to recover benefits from the recipient’s estate.
What do you need to provide to your attorney?
the Deed
the names, addresses and marital status of the Grantor(s) and Grantee(s)
the latest Will and Testament
any known copies of any recorded Liens
a recent appraisal and/or tax appraisal on the real estate
The advantages of a Lady Bird deed
You will be able to avoid any probate for your home after death.
You maintain the right to use and profit from your property during your lifetime. You can also sell at any time without the approval of the beneficiaries.
You will not have to “gift” your home, which may be subjected to the federal gift tax.
You won’t have to risk your Medicaid eligibility.
You won’t have to worry about the state selling your property to help repay the Medicaid benefit costs you incurred over your lifetime.
You won’t have to change your house insurance as compared to a trust.
There are no transfer taxes as per MichiganLandMan.com.
The disadvantages of a Lady Bird deed
If your goal was to pass the property onto multiple heirs after death, then this deed may cause disputes, according to Mika Meyers. If this is the case, then a living trust may need to be considered.
Those who own multiple properties may find it harder to amend a Lady Bird deed as compared to one trust.
The property deed is a countable asset for Medicaid purposes unless it is exempt.
There will be no control after death unless it was conveyed to a trust.
In some cases, ReneeWoodLaw.com mentions those who are unfamiliar with them may misclassify them.
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