A Lady Bird Deed and a Quitclaim Deed are both types of real estate deeds used for different purposes and with distinct features. Here’s a comparison of the two:
1. Transfer of Property Ownership:
- Lady Bird Deed: A Lady Bird Deed, also known as an Enhanced Life Estate Deed, is used to transfer property to designated beneficiaries upon the death of the grantor while allowing the grantor to retain control and use of the property during their lifetime. It operates as a life estate with an enhanced or retained power to sell, mortgage, or change beneficiaries.
- Quitclaim Deed: A Quitclaim Deed is used to transfer whatever interest or claim the grantor has in a property, without making any warranties about the title. It does not guarantee that the grantor actually owns the property or that the title is clear; it simply conveys the grantor’s interest, if any, to the recipient.
2. Probate Avoidance:
- Lady Bird Deed: The primary purpose of a Lady Bird Deed is to avoid probate. The property automatically transfers to the named beneficiaries upon the grantor’s death without going through the probate process.
- Quitclaim Deed: A Quitclaim Deed does not provide the same probate avoidance benefits as a Lady Bird Deed. The property transferred through a Quitclaim Deed may still be subject to probate, depending on the circumstances.
3. Control and Use of Property:
- Lady Bird Deed: The grantor retains control and use of the property during their lifetime, allowing them to sell, mortgage, or otherwise deal with the property as they see fit.
- Quitclaim Deed: The grantor transfers their interest in the property, if any, without retaining any control or rights to the property.
4. Title Guarantees:
- Lady Bird Deed: Typically, Lady Bird Deeds come with certain guarantees, and they convey a clear title to the property upon the grantor’s death. This means that the beneficiaries receive the property with a clean title, free from most claims and encumbrances.
- Quitclaim Deed: Quitclaim Deeds do not provide any warranties or guarantees about the title. The recipient takes the property “as is,” which means they may inherit any existing title issues or claims against the property.
5. Common Uses:
- Lady Bird Deed: Lady Bird Deeds are commonly used in estate planning to transfer property to heirs or beneficiaries while allowing the grantor to maintain control and use of the property during their lifetime. They are especially useful for Medicaid planning and avoiding forced property sales.
- Quitclaim Deed: Quitclaim Deeds are often used in situations where the grantor wishes to transfer their interest in a property to a family member, remove a spouse’s name from a property title after divorce, or clarify property ownership in non-sale situations.
It’s crucial to consult with a qualified attorney when considering either type of deed to ensure that it aligns with your specific goals and that you comply with the legal requirements in your jurisdiction. Additionally, the choice between the two deeds will depend on your individual circumstances and objectives.
