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The State of California allows family members to pass real property to beneficiaries in a number of different ways. Property can be passed through a Life Estate Deed, Will or Intestate Succession, Intervios Trust, Joint Tenancy, Community Property, Intervivos Transfer with Reserved Life Estate, Conveyance Pursuant to Non-Probate Transfer and/or an Enhanced Life Estate Deed.
An Enhanced Life Estate Deed, also called a Lady Bird Deed, has been recognized in California since 1914. The nickname Lady Bird Deed is from President Johnson and his wife Lady Bird Johnson. Allegedly President Johnson used this type of deed to convey some land to Lady Bird, his wife.
A Lady Bird Deed or Enhanced Life Estate Deed can be used like a warranty Deed or Quit Claim Deed with added benefits to the transferor.
An Enhanced Life Estate Deed is a legal document that transfers property to designated heirs upon death, but also preserves the right to sell the property before death. This allows the client to maintain ownership of the property directly and sell the property at any time without notifying potential beneficiaries. If the client never sells the property before passing away, it will transfer directly to the beneficiaries without going through probate. A Lady Bird Deed, does not require a trust, gives the owner extra flexibility and the property avoids probate.
Use of a Lady Bird Deed allows the tenancy of the real property to continue, creation of the deed does not transfer the property. This is important for Medicare eligibility ramifications. The transfer after death can also help avoid Federal gift taxes. The value of the property is calculated at a stepped up cost basis. This benefits the beneficiaries by possibly reducing capital gains taxes that must be paid on the income produced by the sale of the home. As noted before, the beneficiaries also receive the property without going through probate. This reduces expenses and shortens the time between death and a full property transfer.
A Lady Bird Deed can be used for real properly like a home or acreage. It can also be used for other real property including furniture, artwork, decorations, and collectables. Due to the potential tax, Medicare and property valuation options, consulting a lawyer is critical to using an Enhanced Life Estate Deed correctly. An estate planning attorney can help families select the proper estate planning tools, which best support individual and family needs.
If you need to create an estate planning and think a Lady Bird Deed may be right for you, speak to an estate planning lawyer in your area today. Attorney Search Network can provide you with an estate planning lawyer referral that can help you achieve your goals.
If you have any questions about the information provided above, please contact us. Call us toll free at (800) 215-1190 or fill out out online form for your Wills and Estate Planning lawyer referral.
If you have any questions about the information provided above, please contact Attorney Search Network.
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