Do You Need a Lady Bird Deed if You Already Have a Trust?

When it comes to estate planning, one common question is whether you still need a Lady Bird deed if you already have a trust in place. The answer depends on your goals, the type of assets you own, and where you live.

What Is a Lady Bird Deed?

A Lady Bird deed, also called an enhanced life estate deed, is recognized in only five states:

• Florida

• Texas

• Michigan

• Vermont

• West Virginia

Other states may offer a similar option known as a Transfer on Death (TOD) deed.

A Lady Bird deed allows you to transfer real estate directly to one or more beneficiaries upon your passing—without going through probate. This can save time, money, and prevent complications in court.

The Purpose of a Trust

A revocable living trust is designed to help you manage and distribute your assets outside of probate. With a trust, you maintain control of your assets during your lifetime and can make changes as needed. At your passing, your beneficiaries inherit those assets without the delays and expenses of probate.

Like the Lady Bird deed, a trust helps avoid probate. But unlike a Lady Bird deed, a trust covers all types of assets, not just real estate.

Do You Need Both a Trust and a Lady Bird Deed?

At first glance, it may seem like you only need one or the other. But in many cases, attorneys recommend using both together.

Here’s why:

• Lady Bird deeds focus only on real estate. A trust covers all assets, including bank accounts, investments, and personal property.

• A Lady Bird deed can name a trust as the beneficiary. This allows your real estate to transfer into your trust automatically when you pass away.

• Trusts provide structure and management. If you have multiple beneficiaries, the trust ensures a single trustee manages or sells the property, preventing disputes or delays.

Without a trust, multiple heirs named directly on a Lady Bird deed may disagree on how to handle the property, which could lead to court involvement. By naming the trust as the beneficiary, you avoid these conflicts.

Special Considerations for Homestead Property

Homestead property—your primary residence—has special protections in Florida and some other states. For example, it is generally exempt from most creditors’ claims.

Many attorneys recommend keeping homestead property in your name while you’re alive. A Lady Bird deed lets you do this while still ensuring that, upon your passing, the property goes into your trust (or directly to your chosen beneficiaries) without probate.

This way, you:

• Retain homestead tax benefits during your lifetime

• Avoid risks of triggering a mortgage lender’s “due-on-sale” clause

• Ensure your trust manages the property after your passing

  
  

The Best of Both Worlds

Ultimately, a Lady Bird deed and a trust are not mutually exclusive. Used together, they provide flexibility, probate avoidance, and added protections for both you and your beneficiaries.

• The trust ensures all your assets—not just real estate—are distributed according to your wishes.

• The Lady Bird deed ensures real estate stays in your control during life but transfers smoothly into the trust after death.

This combination can help prevent disputes, protect homestead benefits, and make estate administration easier for your loved ones.

Conclusion

Choosing between a Lady Bird Deed, a revocable trust, or both depends on your estate planning needs. A Lady Bird Deed is a simple solution for transferring real property in states like Texas, Vermont, Michigan, West Virginia, or Florida. A revocable trust offers broader asset management and trustee oversight. Combining the two—by naming your trust as the beneficiary of a Lady Bird Deed—can provide the best of both worlds, especially for homestead property or when multiple beneficiaries are involved.

Note: This article is for informational purposes only and is not legal advice. Consult a qualified attorney for estate planning guidance.

Schedule a FREE Consultation