Lady Bird Deeds in Georgia
The state of Georgia has historically not recognized transfer on death deeds, also called Lady Bird deeds. But in July 2024 the state passed legislature which will recognize these deeds as valid and allow property to be transferred outside of probate or a Trust with these deeds.
What is a Transfer on Death Deed?
A transfer on death deed does exactly what is says. It transfers property from one person to another upon the death of that person. The Lady Bird Deed is a tool that many have used for estate planning purposes for years in other states. It allows the property to pass to another owner at the death of the original owner without the need for probate. This also allows the owner of the property to retain control of the property until their death.
Why is it called a Lady Bird Deed?
There are many speculations as to why the term Lady Bird Deed is the popular name for these types of transfer on death deeds.
The most popular is that former President Lyndon B. Johnson’s estate had a court case regarding a deed in his estate which had transferred his property to his wife, who was popularly known as Lady Bird Johnson. Some say this deed was the first ever Lady Bird Deed ever drafted.
Why Would You Use a Lady Bird Deed?
As mentioned above, the point of a Lady Bird Deed is to seamlessly transfer your real estate assets to another person at the time of your death. This means you continue to own the real estate and retain control of it until your death.
The benefit of using a Lady Bird deed rather than joint ownership is that you retain full control of the real estate. You can decide to sell or gift the property at any time during your lifetime— without having to have anyone sign off on this. Whereas, if you instead decided to own the property jointly with right of survivorship, you are no longer the sole owner of the property. Meaning you would need that joint owner to also sign off on a sale, gift, or any changes to the deed.
Many people know exactly who they want their property to transfer to upon their death. A Lady Bird Deed may be a good choice for this type of transfer.
When is a Lady Bird Deed Not a Good Choice?
It’s possible that a Lady Bird Deed may not be the right choice for you— even if you know exactly how you want the real estate to transfer upon your death.
While a Lady Bird Deed can be a simple solution to avoiding probate, it may not be the best way for your estate to avoid probate.
A Lady Bird Deed does not allow for the same types of safeguards and instructions that a Trust can put into place. You can choose to deed your real estate to a Trust and then leave very detailed instructions for how the property is to be used or distributed to your beneficiaries.
Perhaps you want to allow your beneficiaries to use and enjoy your real estate for generations to come. If you use a Lady Bird Deed and deed the property to an individual, there is nothing stopping them from turning around and selling the property the week after you die. But if you instead deed the property to a Trust, leave detailed instructions for how the trustee is to maintain the property, and name beneficiaries who are allowed to use and enjoy the property, your goal of having a property that can be used and enjoyed by your family for generations to come is much more likely.
Additionally, deeding your property to a Trust means that there are backups in place for who inherits the property upon your death. For instance, if you were to execute a Lady Bird Deed today leaving the property to your spouse upon your death, everything is all good until your spouse is unable to receive or inherit that property. If your spouse had died before you, or in a common accident, the property now has to go through probate because your named beneficiary is not eligible to inherit the property. Conversely, if you deed the real estate to your Trust you can still name your spouse as the first person to inherit the property. But in the event your spouse is unable to inherit any property passing to them through the Trust you would name one or more backup beneficiaries to receive the property. A Trust also allows for you to define who the takers of the last resort, also called remote contingent beneficiaries, are. This means you have an article of instruction within your Trust that essentially says, “if no one named in my Trust is available or alive to receive my assets I want XYZ to happen.” Most people choose to name heirs as the state of Georgia determines to be the takers of the last resort in their Trusts. But you can also designate the assets to benefit charity.
Lady Bird Deeds should not be used to transfer real estate to minors. The transfer on death deed will “work,” but the real estate will be stuck in limbo until a court appointed conservator manages it for the minor.
Georgia law requires the beneficiaries of a transfer on death deed to file an affidavit within 9 months of the death of the owner. If this affidavit is not filed in a timely manner, the transfer will not be effective and the property will be owned by the estate of the decedent. This will result in the need for probate. Transferring property by trust does not have this requirement that creates a risk of a failed transfer.
It is a great thing that the state of Georgia is now recognizing Lady Bird Deeds. This new legislation could save people a lot of money and time avoiding probate. But as we discussed above, it may not be the best way for you to avoid probate.
If you want your real estate to transfer on your death to a beneficiary, please contact our office. We would love to review not just your real estate, but your entire estate to help you determine what options are best for you and your loved ones. Call us at (404) 736-6066 or visit our website to schedule a consultation.