Lady Bird Deed vs Trust: What’s the Difference?

When it comes to estate planning, one of the most common questions homeowners ask is:
“Should I use a Lady Bird Deed or set up a trust?”

Both tools are designed to help your property pass smoothly to your heirs without going through probate court — saving time, money, and stress. But while they share that goal, they work in very different ways and are suited for different situations.

This guide breaks down the differences between Lady Bird Deeds (also called Enhanced Life Estate Deeds) and revocable living trusts, so you can decide which option is the best fit for your estate plan.

Why This Comparison Matters

Many people assume that a trust is the only way to avoid probate — but that’s not always true. In states like Florida, Texas, Michigan, Vermont, and West Virginia, a Lady Bird Deed can achieve the same result for your primary residence, often at a fraction of the cost.

However, trusts offer more flexibility when managing multiple properties, investments, or complex family situations. Choosing the wrong tool can lead to unnecessary expenses, gaps in your plan, or even disputes among heirs later.

By understanding how these two options compare, you can:

• Save money by avoiding unnecessary legal fees

• Simplify your plan if you only need a deed for one property

• Protect your family’s privacy if you prefer to keep your affairs out of the public record

• Plan ahead strategically for taxes, Medicaid eligibility, and long-term care

Lady Bird Deed in a Nutshell

A Lady Bird Deed is a special type of deed that lets you keep full control of your property during your lifetime while naming one or more beneficiaries who will inherit automatically when you die. Unlike a traditional life estate, you can:

• Sell, refinance, or mortgage the property without their permission

• Change beneficiaries at any time

• Revoke the deed completely if you change your mind

It’s a simple, low-cost option — but it’s only available in five states and typically applies to a single property (often your homestead).

Revocable Living Trust in a Nutshell

A revocable living trust is a legal entity you create to hold your property and other assets. You remain in control as the trustee while you are alive, and you name a successor trustee to manage and distribute assets after your death.

Trusts can cover multiple properties, bank accounts, investments, and personal belongings. They also offer privacy (because they are not part of the public record) and can include detailed instructions for asset distribution, care of minor children, or special needs planning.

What You’ll Learn in This Guide

In the sections ahead, we’ll explore:

• How a Lady Bird Deed works compared to a trust

• The pros and cons of each option

• A side-by-side comparison chart covering cost, control, privacy, and Medicaid impact

• Real-world examples to help you see which tool might work best

• A decision-making checklist to help you choose with confidence

Whether you are a homeowner with a single property or someone with a more complex estate, this guide will help you make an informed choice that fits your goals, budget, and family situation.

How a Lady Bird Deed Works

A Lady Bird Deed, also called an Enhanced Life Estate Deed, is one of the simplest estate planning tools available for homeowners in certain states. Its main purpose is to transfer property automatically to your chosen beneficiary at death — without the delays and costs of probate.

Here’s a closer look at how it works and why it can be an attractive option.

1. Ownership During Your Lifetime

When you create a Lady Bird Deed, you remain the full owner of the property during your life. This is what makes it different from a traditional life estate. With a standard life estate, you give up some control — you can’t sell, mortgage, or change beneficiaries without their consent.

But with a Lady Bird Deed, you retain the enhanced life estate, which means:

• You can sell the property at any time

• You can take out a mortgage or refinance without asking permission

• You can revoke or change the deed if your plans or family situation change

This level of control is a key advantage, especially if you want flexibility for the future.

2. Automatic Transfer After Death

When you pass away, the property automatically transfers to the beneficiaries named in the deed. This is called a non-probate transfer, because it happens outside the court system. Your beneficiaries only need to file a death certificate (and sometimes an affidavit) with the county clerk to have the title updated.

This process is usually quick — often completed within a few weeks — compared to probate, which can take months or even years.

3. Tax Benefits

Another major advantage of a Lady Bird Deed is the step-up in basis for capital gains tax purposes. When the beneficiary inherits the property, the tax basis resets to the fair market value as of the date of death.

Example:

• Home purchased in 1998 for $100,000

• Worth $350,000 at the owner’s death

• Beneficiary sells for $360,000

Capital gains are calculated only on the $10,000 difference between value at death and sale price — not on the $260,000 appreciation during the owner’s lifetime. This can save thousands in taxes.

4. Medicaid and Long-Term Care Planning

Lady Bird Deeds are also popular because they are Medicaid-friendly in many states. They do not count as a completed gift and do not trigger a penalty for Medicaid eligibility. Plus, because the property bypasses probate, it is often shielded from Medicaid estate recovery after the owner’s death.

5. Limitations to Keep in Mind

While a Lady Bird Deed is powerful, it has some limitations:

• State Availability: Only recognized in Florida, Texas, Michigan, Vermont, and West Virginia

• Single-Property Focus: Best for one primary residence, not multiple properties or complex estates

• Public Record: The deed is recorded with the county, so beneficiary information is public

Key Takeaway

A Lady Bird Deed is ideal if you:

• Own a single home in one of the five eligible states

• Want to avoid probate with minimal cost

• Prefer to keep full control of your property while alive

• Have a relatively simple estate plan

In the next section, we’ll compare this to a revocable living trust, which offers broader capabilities for more complex situations.

How a Revocable Living Trust Works

A revocable living trust is one of the most popular estate planning tools in the United States — and for good reason. Unlike a Lady Bird Deed, which is limited to real estate, a trust can hold multiple types of assets, provide detailed instructions for distribution, and offer privacy throughout the process.

Here’s how it works and why many people choose it over a deed.

1. Creating the Trust

You start by drafting a trust agreement, which is a legal document that:

• Names you as the grantor (the person creating the trust)

• Appoints yourself as the trustee (manager of the assets)

• Names a successor trustee who will take over after your death or incapacity

• Lists your beneficiaries and how they should receive the assets

Once the trust document is signed and notarized, you transfer ownership of your property (and any other assets you want covered) into the trust’s name. This process is called funding the trust.

2. Control While You Are Alive

Despite transferring ownership into the trust, you keep full control as the trustee. You can:

• Sell or refinance trust property

• Add or remove assets

• Amend or revoke the trust entirely if your plans change

This makes a revocable trust very flexible — it works almost like you still personally own the assets, but with legal benefits built in.

3. What Happens After Death

When you pass away, your successor trustee takes over management of the trust. They follow the instructions you left in the trust document, which may include:

• Distributing property directly to beneficiaries

• Selling property and dividing proceeds

• Holding assets in trust for minor children until they reach a certain age

This process avoids probate entirely, just like a Lady Bird Deed, but it can also handle multiple assets — not just a single home.

4. Privacy Advantage

Unlike deeds or wills, which become part of the public record, a trust remains private. Only the trustee and beneficiaries have access to its terms. This is a major benefit if you prefer to keep financial matters confidential or want to minimize family disputes.

5. Costs and Maintenance

A living trust does have some costs. Attorney fees for creating one typically range from $1,500 to $3,500 depending on complexity. There is also some ongoing maintenance:

• Keeping the trust funded (adding new property as you acquire it)

• Updating it if you move to another state or have major life changes

• Potentially hiring a trustee or professional advisor if you cannot manage it yourself

6. When a Trust Makes Sense

A revocable living trust is usually the best choice if you:

• Own multiple properties, especially in different states

• Have a blended family or want to control how and when beneficiaries receive assets

• Want to keep your estate plan private

• Need a comprehensive solution that covers bank accounts, investments, and personal property as well as real estate

Key Takeaway

A trust provides more control and coverage than a Lady Bird Deed — but at a higher cost and with more administrative work. It’s ideal for those with complex estates, multiple assets, or a desire for privacy.

In the next section, we’ll look at a side-by-side comparison of Lady Bird Deeds and trusts to help you see the key differences at a glance.

Lady Bird Deed vs Trust: Key Differences

Now that you understand how both a Lady Bird Deed and a revocable living trust work, it’s time to compare them side by side. This comparison will help you quickly see which option better fits your goals, budget, and family situation.

1. Probate Avoidance

Both tools avoid probate, but they do it differently. A Lady Bird Deed bypasses probate for a single piece of real estate by automatically transferring it to your beneficiaries at death. A trust avoids probate for all assets placed inside it, not just real estate. If you own bank accounts, investments, or multiple properties, a trust provides a more comprehensive solution.

2. Cost

A Lady Bird Deed is usually much cheaper to set up — often between $150 and $500, even when prepared by an attorney. By contrast, a revocable living trust typically costs $1,500 to $3,500 to draft, and may involve additional costs for deeds transferring property into the trust. For homeowners with a limited budget and only one property, the cost advantage of a Lady Bird Deed is significant.

3. Control During Life

Both options let you maintain full control of your property during your lifetime. With a Lady Bird Deed, you keep an enhanced life estate, meaning you can sell, refinance, or change beneficiaries at any time. A trust allows similar control — you can amend or revoke it as long as you are competent — but it requires that you keep the trust properly funded for it to work.

4. Flexibility and Changes

Lady Bird Deeds are simple to change: you just record a new deed with updated beneficiaries. Trusts require a formal amendment, which may involve additional attorney fees. However, trusts offer more detailed planning options, such as distributing assets over time or holding them for minors or special needs beneficiaries.

5. Privacy

Privacy is one area where trusts have a clear advantage. A Lady Bird Deed is a public document, so anyone can see who the beneficiaries are. A trust remains private, and its terms are only disclosed to trustees and beneficiaries, which can reduce family disputes and keep financial information confidential.

6. Medicaid Planning

Both options can be used strategically for Medicaid planning, but Lady Bird Deeds are particularly popular because they do not trigger a penalty period and often protect the property from Medicaid estate recovery. Trusts can also be part of a Medicaid plan, but require more advanced planning and, in some cases, the use of an irrevocable trust.

7. Multi-Property or Complex Estates

If you own multiple properties, especially in different states, a Lady Bird Deed becomes less practical because you would need a separate deed in each location — and not all states allow them. A revocable living trust can hold all properties in one document and streamline management, making it the better choice for larger or more complex estates.

8. Administration After Death

After death, a Lady Bird Deed requires beneficiaries to file a death certificate and possibly an affidavit. This process is quick, but limited to the property described in the deed. A trust allows a successor trustee to step in immediately and handle all trust assets according to your instructions without court supervision.

Comparison Table

Key Takeaway

A Lady Bird Deed is best for homeowners with one property who want a simple, low-cost way to avoid probate. A revocable living trust is ideal for those with multiple assets, complex family dynamics, or a desire for privacy and detailed control. In the next section, we will explore when it makes sense to choose a Lady Bird Deed over a trust.

When to Choose a Lady Bird Deed

A Lady Bird Deed can be a powerful, low-cost solution for many homeowners, but it isn’t right for everyone. If you meet certain criteria, this option can save you time, legal fees, and hassle — while still giving your beneficiaries a smooth path to inheritance.

1. You Own a Single Primary Residence

Lady Bird Deeds work best when your main estate planning goal is to pass a single property — usually your homestead — to your heirs. If this is your primary or only significant asset, a trust may be more than you really need.

Example: A widow in Florida owns her home free and clear and wants it to go to her two children when she dies. A Lady Bird Deed lets her name them as remainder beneficiaries, avoid probate, and keep full control of the home during her lifetime.

2. You Want to Avoid Probate Without Complicated Planning

Probate can take months or even years and cost thousands of dollars in legal fees. A Lady Bird Deed skips probate entirely for that property. The beneficiaries simply record a death certificate and the property is theirs — no court hearings, no probate attorney.

This is ideal for families that prefer a straightforward process and do not want to deal with lengthy court proceedings.

3. You Value Flexibility and Control

Unlike a standard life estate, a Lady Bird Deed allows you to:

• Sell or mortgage the property without your beneficiaries’ consent

• Change your mind about who inherits the property

• Cancel the deed entirely if your situation changes

This flexibility is helpful if you think you may downsize, refinance, or change beneficiaries in the future.

4. You Need Medicaid-Friendly Planning

In states that allow them, Lady Bird Deeds are one of the most effective tools for protecting a home while qualifying for Medicaid. Because the transfer does not count as a completed gift, it does not create a penalty period for eligibility. And since the home avoids probate, it is generally protected from Medicaid estate recovery.

5. You Want Low Upfront Costs

Compared to setting up a revocable trust, a Lady Bird Deed is very affordable. Even when prepared by an attorney, it often costs a few hundred dollars, not thousands. This makes it accessible for homeowners with modest estates.

6. You Live in a State That Recognizes Lady Bird Deeds

Currently, only Florida, Texas, Michigan, Vermont, and West Virginia formally recognize Lady Bird Deeds. If you own property in one of these states, you can take advantage of this planning tool.

If your property is located elsewhere, you may need to explore alternatives like Transfer-on-Death Deeds or a revocable living trust.

Key Takeaway

Choose a Lady Bird Deed when you want a simple, inexpensive, flexible solution for transferring a single property outside probate. It is an especially strong choice if you are concerned about Medicaid planning, have straightforward estate goals, and want to maintain control over your home until your last day.

In the next section, we will explore scenarios where a revocable living trust is a better fit — such as when you have multiple properties, complex family dynamics, or privacy concerns.

When to Choose a Trust

While Lady Bird Deeds are excellent for simple estates, a revocable living trust becomes the superior choice when your situation involves multiple assets, complex family structures, or a need for greater privacy and control. Here’s when a trust is often the better solution.

1. You Own Multiple Properties

If you have several real estate holdings — especially in different counties or states — a trust consolidates them under one document. This avoids the need to create and record multiple deeds, which can be expensive and confusing.

Example: A couple owns a primary home in Florida, a rental property in Texas, and a vacation condo in North Carolina. A Lady Bird Deed would only work in Florida and Texas. A revocable living trust allows them to manage and pass all three properties seamlessly.

2. You Have a Complex Estate

Trusts shine when you need detailed instructions for asset distribution. You can specify:

• How much each beneficiary receives

• Whether distributions are staggered over time

• Conditions for receiving funds (e.g., reaching a certain age or completing college)

This level of customization is not possible with a Lady Bird Deed, which simply transfers ownership outright.

3. You Want Privacy

Unlike deeds, which are recorded publicly, trusts remain private. Only trustees and beneficiaries see the terms. This helps keep family matters confidential and can reduce disputes by clearly spelling out your wishes without exposing them to public scrutiny.

4. You Have Minor Children or Special Needs Beneficiaries

If any of your beneficiaries are minors or require special care, a trust allows you to hold assets for their benefit under a trustee’s supervision. This ensures the property and funds are managed responsibly until they are ready to take control.

Example: Parents with a child who has a disability may use a special needs trust provision to protect eligibility for government benefits while still providing financial support.

5. You Want Ongoing Management After Death

With a trust, you can create long-term arrangements for managing assets even after you’re gone. For example, you could instruct the trustee to keep rental properties generating income for the family rather than selling them immediately.

6. You Have a Blended Family

Trusts are particularly useful if you have children from a prior marriage. You can ensure your spouse has the right to live in the home for life, while guaranteeing that the property ultimately passes to your children. This level of planning helps prevent conflicts between a surviving spouse and stepchildren.

7. You Are Concerned About Incapacity

Unlike a Lady Bird Deed, a trust also provides for management of your assets if you become incapacitated. Your successor trustee can step in immediately to handle bills, property upkeep, and other responsibilities without the need for a court-appointed guardian.

Key Takeaway

Choose a revocable living trust when you have multiple assets, privacy concerns, special distribution instructions, or a blended family. While it requires more setup and maintenance than a Lady Bird Deed, a trust provides a comprehensive, private, and highly flexible estate planning solution.

In the next section, we’ll cover a decision-making checklist to help you choose confidently between a Lady Bird Deed and a trust.

Making the Right Decision

Choosing between a Lady Bird Deed and a revocable living trust is not a one-size-fits-all decision. Both tools can help you avoid probate and transfer property efficiently, but the best choice depends on your goals, assets, and family situation. Here’s how to decide with confidence.

1. Start with Your Goals

Ask yourself these questions:

• Do I just want my home to pass to my heirs quickly and easily?

• Do I need to cover multiple properties, bank accounts, or investments?

• Do I want to keep my estate plan private?

• Are there minors, blended family issues, or special needs beneficiaries to consider?

• Do I want detailed instructions for how assets are distributed over time?

Your answers will point you toward either a simple, deed-based solution or a more comprehensive trust.

2. Use a Decision Checklist

Here’s a quick side-by-side decision guide:

3. Consider the Costs

If cost is your primary concern, a Lady Bird Deed is the clear winner. It can be prepared for a few hundred dollars and requires little ongoing maintenance. Trusts cost more upfront but may save money later by avoiding disputes and consolidating assets under one plan.

4. Think About Simplicity

Lady Bird Deeds are simple and require minimal paperwork. Trusts require more setup and must be kept updated (funded) to work properly. If you prefer a “set it and forget it” approach for a single property, a Lady Bird Deed is ideal.

5. Get Professional Guidance

Even if you feel confident about your choice, consulting an estate planning attorney can give you peace of mind. They can review your situation, explain state-specific laws, and ensure your documents are properly drafted and recorded.

6. Revisit Your Plan Periodically

Whichever option you choose, review it every few years or after major life events (marriage, divorce, birth of children, death of a beneficiary). Updating your plan ensures it continues to meet your needs.

Final Thoughts

A Lady Bird Deed is a simple, affordable solution for passing a single property outside probate. A revocable living trust is a more comprehensive tool that covers multiple assets, offers privacy, and provides detailed control. By aligning your choice with your goals and family situation, you can create an estate plan that saves time, money, and stress for your loved ones.

Next Step: Speak with a qualified estate planning attorney in your state. They can help you decide whether a Lady Bird Deed, a trust, or a combination of both is right for your situation — and ensure everything is executed correctly.