What is a Ladybird Deed?
A "Ladybird Deed" (also called an enhanced life estate deed) transfers your real property automatically at the time of your death to the future owner(s) you name without relying on probate — similar to naming a beneficiary on a life insurance policy.
How it works
During your lifetime, your rights to the property are not affected. You may still sell, lease, and mortgage your property after executing the deed, and you may revoke the Ladybird Deed in the event you change your mind.
The advantages of a Ladybird Deed
- Avoids probate
- Treats your home as an exempt asset for Medicaid if the property is your primary residence (preserving eligibility for Medicaid)
- The State cannot file a claim against the property for repayment (preserving the full value of the property)
- Avoids the gift tax
- Does not impact your property taxes
- The beneficiary can sell the property upon your death without paying taxes on the proceeds
The drawbacks of a Ladybird Deed
- Future owners own property jointly and are personally responsible for taxes, insurance, and maintenance
- All owners must agree on sale or transfer
- Confusion/complexity if a future owner predeceases you
- Not an option for minors or those with special needs
