He was freed on Washington's death. He had already broken 2 knee caps and couldn't effectively serve Washington. He had a free "wife" (in "" because it wasn't legally recognized). And he seems to have had a special relationship with Washington that not many people (certainly no other slaves) had.
So, why wait until death to release Lee?
Billy Lee was the only slave freed on Washington's death, the other 123 had to wait until Martha died