July 04, 2021

Should A Ladybird Real Estate Be In A Castle Trust?

Named after Ladybird Johnson, a Ladybird deed is like a beneficiary designation for the home. It says that if you or your spouse were to pass away, it goes to whoever you’ve listed on that deed.
Its technical term is Enhanced Life Estate Deed.

So, should a Lady Bird real estate be in a Castle Trust?
The answer is no. Instead, we will deed the property directly to the trust.
You would only do a Ladybird deed if you have a Basic Revocable Trust or no trust at all.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.

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Episode Transcript

LadyBird Real Estate

Should a ladybird real estate be in a trust welcome to Berry’s Bites.

Please join our host, attorney, and financial advisor Chris Berry with regards to real estate whenever we’re talking about homes and second pieces of property really we’re only doing two things like 95% of the time so one is we do what we call a ladybird deed. Really what this is is just a beneficiary designation for the home to say that if you or you and your spouse were to pass away, it goes to whoever we’ve listed as a beneficiary on that deed.

A lot of people call it a ladybird deed named after lady bird johnson there was a law professor that wrote a book on different types of deeds and named each type of deed after a celebrity that’s where the ladybird deed came from. Really what this is called is a technical term is an enhanced life estate deep so you can sell it you can refinance you can do whatever you want. And typically and then upon death then it flows into the trust or goes to whoever the beneficiary is.

Castle Trust

So typically we’re doing this when we do a revocable living trust or a will-based estate plan now the second option would be deeding it directly to an asset protection trust so if we do set up an asset protection trust a castle trust we will deed the property directly to the trust and so now the home is owned by the trust instead of you the advantage here is that it’s protected from that nursing home or Medicaid spend-down. It’s protected from creditors and you can sell the property and all the proceeds would remain in the trust and would remain protected so should a ladybird deed be in a Castle Trust the answer is no instead we would deed the property directly to the trust if you have a Castle Trust you would not do a ladybird deed you would need the property directly to the trust you would do a ladybird deed if you have a basic revocable trust or no trust at all.