The main difference between a Traditional life estate and a Ladybird “Enhanced” Life Estate ultimately comes down to how much control is retained by the grantor as opposed to the listed successor (remainderman). To see the difference more clearly, we must dive into the two different types of Life Estates in this topic.
A traditional life estate is a limited ownership interest.
Once the deed is recorded, not only is it irrevocable, but the still-living property owner must now obtain the remainderman’s consent to matters that will affect the property at issue.
This is because two property interests are automatically created upon a “traditional life estate” being recorded in a deed. One for the owner and one for the remainderman.
During the owner’s life, he or she holds onto their possessory interests, the right to presently possess the property, which lasts until their death, at which point title would automatically transfer to the designated remainderman listed on the deed.
The remainderman’s interest in the property (remainder interest), will only vest at the time of the owner’s death. This essentially creates a co-ownership of the property, as the remainderman will now have a say as to what happens, or will happen, to the property he or she will receive.
While the remainderman cannot possess the house until the death of the owner, the remainder man’s consent will now be needed to make certain changes affecting the property.
This includes the ability to transfer or mortgage the property during life, and further, the property owner will not be able to appoint a new successor without the previous remainder man’s consent.
A Lady Bird deed avoids the traditional form by expressly reserving the life tenant’s right to transfer, lease, to complete renovations, mortgage, or otherwise use the property as he or she wishes, regardless of the remainderman’s future interest.