Trust vs lady bird deed to avoid probate on your home
Attorney Tom Olsen: Holley, here's a text and they're saying, ''What is the difference between using a ladybird deed and a trust to avoid probate? What do you think?
Attorney Holley Knapik: For us, we're always looking for simple ways to help our clients avoid probate versus complex tools, and a living trust would be a complex tool versus a ladybird deed or enhanced life estate deed, which is a simple tool which allows you to maintain ownership in your home but you're literally naming your children as the beneficiaries of the home upon your passing, and it'll automatically transfer to them with the only requirement of recording a death certificate in the county where the property's located.
However, sometimes the complex tool, the living trust is necessary if you have a complex plan of distribution or you're including the grandkids, or you might have a spendthrift child and then we're going to use that trust because you've got a little extra going on in your plan.
Tom: Great answer, Holley. Here at the Olsen Law Group, we're all about helping people to avoid probate. People want to avoid probate because it's expensive and it takes a long time. For example, we tell them, ''Make your bank accounts, keep them in your name only, but make them POD payable on death to your children.'' If you make your bank account's POD and you pass away, the only thing your children need to do is to show the bank or credit union, or investment company your death certificate. They'll turn the money over them, no probate required.
We look at this ladybird deed also known as enhanced life state deed, like making your property POD. Within the body of the deed, it literally states the names of who gets this property when you pass away. We're always talking about your children, but it could be your friends, it could be a charity so that when you do this ladybird deed and you pass away, the only thing your children need to do is record your death certificate in the public records. That property will automatically belong to them, no headaches, no hassles, no probate.
Holley: Absolutely, it is that simple.
?Speaker: Caller Jess [unintelligible 00:02:09]
Tom: Holley, I've been doing ladybird deeds for 20 years now, and I'm always amazed that I was ahead of my time way back in the day doing those things. We use them all the time now and the more we use them-- which is thousands of times, the more we now have people passing away where we've done a ladybird deed for them. Just always they're amazed, we're always pleased about how simple it is for them.
Holley: That's what's taking place now. We get to see the fruits of that labor and know that the loved ones come into us and they say, ''Hey, we just wanted to make sure everything is okay.'' We file the death certificate and now the property's in our names, that's exactly what we wanted.
Tom: Yes. We get calls every day and it goes like this, ''Tom, my mom has passed away, you did the estate planning for, and I need to know what to do.'' We look in our records and we say, ''Oh, well, we did a ladybird deed for your mom to avoid probate. All you need to do is record her death certificate in the public records, and the home will automatically belong to you.'' They're like, what? Really? That's all it takes?''
Holley: That's it.
Tom: Wow, that's good news.
Holley: See the happiness and the release sometimes when they walk in and we sit with the client just lets that you did your job right. Again, we're helping people avoid probate.
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