Revocable Trust vs Lady Bird Deed
Revocable Trust vs. Lady Bird Deed
A Lady Bird deed, also called an enhanced life estate deed, can also be used in certain states to transfer real estate outside of probate. However, it is a much more limited estate-planning tool than a revocable trust.
| Revocable Living Trust | Lady Bird Deed |
|---|---|
| Can hold real estate and many other types of assets | Generally applies only to a specific piece of real estate |
| Can help avoid probate for assets properly titled in the trust | Can allow the specific property named in the deed to pass outside probate |
| Can provide instructions for managing assets during incapacity | Primarily addresses what happens to the real estate at death |
| Can control how and when beneficiaries receive property | Usually transfers the property directly to the named beneficiary at death |
| Can address multiple beneficiaries and more complex family situations | Typically much simpler and more limited |
| Trust terms generally remain private | The deed itself is recorded in the public land records |
| Available as an estate-planning structure nationwide, subject to state law | Lady Bird deeds are recognized or commonly used only in certain states |
Why Would Someone Choose a Lady Bird Deed?
For someone whose primary concern is keeping one piece of real estate out of probate, a Lady Bird deed may be a relatively simple option where state law permits it.
The owner generally keeps control of the property during life and can usually sell, mortgage, or otherwise deal with the property without obtaining permission from the future beneficiary. At death, the property can transfer to the named beneficiary without going through probate.
However, a Lady Bird deed does not create a complete estate plan. It does not provide the same ability to manage bank accounts, investments, personal property, or other assets, and it does not provide the same level of planning for incapacity or ongoing beneficiary management that a trust can provide.
Why Consider a Revocable Trust?
A revocable living trust can be much more comprehensive.
Rather than addressing only what happens to a house, a trust can become the framework for managing and transferring many of your assets. It can also provide detailed instructions about what happens if you become unable to manage your affairs and what happens to your property after your death.
For families who value privacy, probate avoidance, control, and simplicity for their beneficiaries, a properly designed and funded trust can be an excellent estate-planning tool.
The question isn't simply, “Do I need a trust?”
The better question is, “What do I want to happen to my property, and what is the best way to make that happen?”
Education first. No pressure. Just options.
Setter Financial is not a law firm and does not provide legal or tax advice. Estate-planning laws and the availability of tools such as Lady Bird deeds vary by state. Legal documents are prepared by attorneys and other qualified estate-planning professionals as applicable.
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