One of the most common questions we get here at Bauer & Associates is “How can I keep my home out of probate following my death?” One method is to use a life estate deed. To ensure a Life Estate Deed or Enhanced Life Estate Deed is right for you, you must consider several items: If your house is encumbered by a mortgage, you must get your banks approval to transfer the title of your property into another’s name. Another important consideration to make is what level of control you wish to retain over the property following your execution of the deed. Lastly you must consider the wishes of the individual who will be taking title to the property following your passing. After making the above considerations, you can better determine which deed below best suits your needs.
The most restrictive transfer, made by way of a Life Estate Deed, is generally used only in situations where the individual whom is receiving title to the property wishes to restrict the rights of the life tenant. When an individual (Grantor) conveys title to their property to another individual (Grantee), and retains for themselves a life estate, the conveying individual losses all right to mortgage, sell, transfer, etc. title to the property. The Grantor possesses only the right to reside on the property until his or her passing and upon death, title to the property will be solely in the Grantee’s name.
Transferring property by way of an Enhanced Life Estate Deed is done to accomplish the same result as a Life Estate Deed but also to give the Grantor the ability to freely convey, mortgage, sell, etc., the property, without the consent of the Grantee. An Enhanced Life Estate Deed (commonly referred to as a “Lady Bird Deed”) leaves the Grantor in the same position they were in prior to their execution of the Lady Bird Deed, except that if the Grantor still owns the property at death, title then passes to the Grantee. A lady bird deed is the preferred method of transfer when compared to a general Life Estate Deed. Upon the Grantors death, the title of the property passes to the Grantee without the need for probate. If you believe you may be interested in a Life Estate Deed or an Enhanced Life Estate deed, please feel free to call our office to schedule a consultation.