A Lady Bird Deed is a unique way to address real estate holdings that you do not want to be part of your will. A lady bird deed form works by dividing ownership into different time periods. Before signing the deed, the present owner has full ownership of the property (called fee simple absolute). This changes when the deed is signed, at which point the ownership is divided into a life estate, which lasts for the lifetime of the present owner, and a remainder interest that does not allow possession until the death of the current owner.
Most of the time a lady bird deed transfers the property from and to the same person. Specifically, it transfers property from the present owner to himself or herself as a life tenant. During his or her life, he or she in most instances will live on and use the property as he or she always has. A lady bird deed form also names one or more remainder beneficiaries. These remainder beneficiaries inherit the property at the death of the current owner. This at-death transfer occurs automatically at the death of the prior owner, without the need for probate.
The life tenant who conveyed the life estate to himself or herself in the lady bird deed has the ability to sell, gift, mortgage, or lease the property without the permission of the remainder beneficiaries. This freedom is a significant benefit over a traditional life estate deed.