Lady Bird Deed vs Revocable Trust
A lady bird deed is a type of legal document used within estate planning to transfer your property without having to go through probate after passing away. This type of deed is also commonly known as an enhanced life estate deed, and is only valid within certain states.
If you’re interested in securing the ownership of your property, finances and other assets, then you might be wondering if you’re better off with a living trust or a lady bird deed- well we’ve got the answer!
This article will tell you everything you need to know about lady bird deeds and give you the best option when it comes to distributing your assets in an easy and efficient manner!
Which States Accept a Lady Bird Deed?
A ladybird deed can be used for estate planning, setting up who you wish to transfer your assets to in the event of your passing.
However, a lady bird deed will only be recognized in certain states, they are a trickier choice than a living trust when it comes to securing the fate of your assets. Here is a list of all the places in which you could create a lady bird deed:
- West Virginia
Aside from these five states, you will most likely encounter issues regarding the validity of a lady bird deed.
Why is title insurance needed for lady bird deeds?
The reason why this kind of deed is not equally valid throughout the country has a lot to do with title insurance. When we speak of title insurance, we are referring to the document that proves that you own the property. Some states do not offer title insurance at all, therefore, a lady bird deed will not be recognized.
Unfortunately, lady bird deeds have quite a lot of loopholes, and this can make it difficult for them to evoke a sense of security. This is why they may not be a good option.
- That’s where a living trust comes into the picture!
- Living trusts help with estate planning and are valid throughout the entire country.
- If you move around a lot or are uncertain about your future plans, then a living trust is an excellent option for you because it works in any state.
Understanding Living Trusts
Creating a living trust is not only easier because it works in every state, but also because it can adjust to your specific needs.
A revocable living trust allows you to keep ownership of your assets even after these have been transferred into the trust itself. This means that you can still have a say in the management of your business, property, vehicle or financial assets.
Creating a revocable living trust gives you the flexibility to amend the document throughout your life. The legal language used in a revocable living trust allows for changes and adjustments without trouble. An irrevocable living trust does not allow for any changes.
Lady bird deed vs revocable trust summary
|Lady bird deed||Revocable trust|
|Distributes property immediately after death.||Distribution of assets can take anywhere from 1-18 months after death, after debts and taxes have been paid.|
|Little restrictions can be placed.||Specific instructions and restrictions on the distribution of assets can be made.|
|Avoids probate.||Avoids probate.|
|Effective for the distribution of simple property.||Better at handling distribution of complex properties.|
Can DoNotPay Help Me Create a Living Trust?
DoNotPay can help you to create a revocable living trust from the comfort of your home. Follow these easy steps and you’ll have a revocable living trust in minutes:
- Log-in to DoNotPay
- Search for the Revocable Living Trust product
- Select where your current location is (keep in mind where you will notarize and sign your living trust)
- Choose who your trustee will be
- Provide all the assets that you wish to be included within the trust
- Select your beneficiaries and how the assets will be distributed between them, plus any additional conditions.
Done! You have created a revocable living trust of your own! DoNotPay will provide you with a printable copy.
State living trust guides
Check out the table below to discover more about living trust requirements in your state:
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