When it comes to estate planning, various strategies can help ensure your assets are protected and distributed as per your wishes. One such tool is known as a Lady Bird Deed.
What is a Lady Bird Deed?
A Lady Bird Deed, also known as an Enhanced Life Estate Deed, is a legal document that allows a property owner to transfer real estate to their beneficiaries while retaining certain rights and control over the property during their lifetime. It is commonly used to avoid probate and facilitate the transfer of property after the owner's death.
Benefits of a Lady Bird Deed
Avoids Probate: By automatically transferring the property to beneficiaries upon death, a Lady Bird Deed avoids the need for probate, saving time and money.
Maintains Control: The grantor retains complete control over the property during their lifetime, allowing them to make decisions about the property without involving the beneficiaries.
Medicaid Protection: The property is protected from Medicaid estate recovery, which means it can remain within the family instead of being used to repay Medicaid benefits.
Tax Benefits: Beneficiaries receive a step-up in basis for capital gains tax purposes, which can reduce the amount of taxes owed if they sell the property after inheriting it.
Keep in mind that it is essential to carefully consider the potential tax implications and limitations associated with this type of deed. Consulting with an experienced estate planning attorney is crucial to understand if a Lady Bird Deed aligns with your specific goals and circumstances.
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