One lesser-known but highly effective tool in estate planning is the lady bird deed, also known as an enhanced life estate deed. Unfortunately, many who could benefit from this deed do not know how it actually works.

As you start drafting your estate plan, you should understand what a lady bird deed is and how it can benefit you and your loved ones.

It began with LBJ and Lady Bird

A lady bird deed allows you to transfer ownership of your real property to a beneficiary while retaining control over the property during your lifetime. The name “lady bird” comes from the deed’s association with President Lyndon B. Johnson, who used this type of deed to transfer property to his wife, Claudia “Lady Bird” Johnson.

How does a lady bird deed work?

When you create a lady bird deed, you retain a life estate in the property, meaning you have the right to use, occupy and enjoy the property for the remainder of your life. Upon your passing, the property automatically transfers to the designated beneficiary without probate.

What are the benefits of a lady bird deed?

Lady bird deeds offer several advantages in estate planning. Since the property transfers directly to the beneficiary upon your death, your loved ones avoid the complications and delays of probate. In addition, you retain full control over the property until your death, including the right to sell, lease or mortgage the property without the beneficiary’s consent.

Lady bird deeds offer an effective way to transfer real property to your loved ones without unnecessary complications. Consider the role this deed could play as you finalize the estate planning process.