As of early 2025, only 32% of Americans have a will, according to Caring.com’s annual estate planning survey. This steady decline points to growing uncertainty about how assets, especially real estate, are handled after death. Fortunately, you can avoid these complexities with estate planning tools like a lady bird deed.
If you’re considering a lady bird deed, this guide covers how it works, which states allow it, its pros and cons, how to create one, and how to remove a beneficiary.
What Is a Lady Bird Deed?
A lady bird deed is a legal document that transfers real estate after the owner’s death. This type of deed is formally called an enhanced life estate deed.
It names a future recipient, known as the remainder beneficiary, who receives the property automatically when the owner dies.
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How Does a Lady Bird Deed Work?
A lady bird deed allows a property owner to name a future beneficiary while keeping full control of the property during their lifetime. The deed is recorded with the county and identifies who will receive the property after the owner dies.
After the owner passes away, the property goes directly to the beneficiary listed in the deed. This transfer happens automatically through the terms written in the deed, based on state laws that recognize enhanced life estate deeds.
Are Lady Bird Deeds Valid In All States?
No, lady bird deeds are only valid in five states: Florida, Michigan, Texas, Vermont, and West Virginia. These states have legal frameworks that allow this type of deed to function as intended.
Outside these states, the deed may not hold legal weight. Some jurisdictions don’t acknowledge the enhanced life estate format, which means they may not recognize the transfer after death.
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Benefits of a Lady Bird Deed
Beyond naming a future property owner, a lady bird deed also provides the following benefits:
Medicaid Planning
A lady bird deed can support Medicaid eligibility by delaying the transfer of assets until death. Since the deed doesn’t trigger an immediate gift, it typically avoids penalties under the Medicaid look-back period.
For example, an applicant in Texas may qualify for long-term care benefits without delay while still setting up future asset transfers through the deed.
Grantor Retains Rights
In a lady bird deed, the grantor keeps full control over the property. You can refinance, lease or rent, sell, or change the beneficiary at any time without anyone else’s approval. This is not possible with most traditional life estate deeds or irrevocable trusts.
For instance, a homeowner who later decides to downsize can do so without needing to undo the deed through court.
Also, it helps to weigh the upfront cost of drafting a deed against other options. If you’re curious, you can compare what trust fees look like versus handling it yourself.
Flexible and Revocable
Unlike other estate planning tools, you can change or revoke a lady bird deed at any point while alive. This provides a level of flexibility not available in irrevocable transfers. If you decide to cancel the arrangement entirely, you can simply record a new deed.
However, since spousal rights can overlap with property transfers, it’s helpful to compare how a prenuptial agreement handles real-estate interests.
Avoids Probate
In lady bird deeds, the property passes directly to the named beneficiary without court involvement. This avoids delays and expenses tied to probate. For example, in empty nesters, civil union, or DINK couples, if one spouse dies, the surviving spouse receives full ownership immediately through the recorded deed without needing court documents.
Although skipping probate can speed things up, you might still need a letter of testamentary if someone other than you is settling the estate.
Prevents MERPs From Seizing Properties
States that follow Medicaid Estate Recovery Programs (MERPs) may try to collect repayment from assets in a deceased person’s estate. A lady bird deed can block this by keeping the property out of probate. In Florida, for instance, it’s commonly used to protect the family home from Medicaid recovery claims after death.
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Limitations of a Lady Bird Deed
Below are the restrictions and legal uncertainties that can limit lady bird deeds’ effectiveness depending on the situation.
Complexity
Lady bird deeds must be drafted precisely to ensure they work as intended. Small mistakes in wording can cause legal conflicts, especially in states that recognize the deed under limited rules. For example, if you use incorrect phrasing or omit particular terms, the county may reject the deed or fail to honor it after death.
Uncertain Legalities
Even in states where the deed is allowed, not all institutions treat it identically. Some lenders or title companies may flag it as a concern during refinancing or sale. If you’re trying to refinance in a recognized state, you might face delays if the lender’s legal team questions the enforceability of the recorded deed.
Another problem is that a lady bird deed only applies to the specific real estate you name in the document. That means once the transfer occurs, the beneficiary holds full title without any built-in protections against future claims from lawsuits, creditor actions, or divorce and separation.
Title Issues
Title insurance providers sometimes view lady bird deeds as a risk, especially if the deed wasn’t recorded correctly or lacks standard clauses. In some cases, courts or insurers require fiduciary bonds to guarantee that beneficiaries will manage the estate assets responsibly.
This can slow down future sales or complicate claims. For instance, you may try to sell the property and run into questions from buyers or insurers about whether the title is fully clear.
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How Do I Create a Lady Bird Deed?
Setting up a lady bird deed requires careful attention to legal wording and state-specific rules. The process isn’t uniform nationwide, and missing required terms can make the deed unenforceable later.
It’s best to work with an estate planning attorney familiar with your state’s property laws. They’ll draft the document to meet local requirements, confirm that the proper legal format is used, and file it with the correct county office.
How to Remove a Beneficiary From a Lady Bird Deed?
To remove a beneficiary from a lady bird deed, you must create a new deed that overrides the original. This updated deed replaces the previously named beneficiary with a new one or removes the designation entirely.
Because the grantor keeps full control during their lifetime, you don’t need permission for the removal. Once you sign the deed and your county records the writing, it becomes the official document on file.
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The Bottom Line
A lady bird deed lets you structure who takes ownership of your property. If the deed meets legal filing standards, you keep full authority during your lifetime while the transfer process remains enforceable. To avoid errors that could void the deed or delay the transfer, consult an estate planning lawyer.
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