At the fall of Habsburg monarchy he remained in Austria and recognized the new republic in order to marry Dagmar, Baroness von Nicolics-Podrinska.

He received the names Leopold Maria Alfons Blanka Karl Anton Beatrix Michael Joseph Peter Ignatz von Habsburg-Lothringen.

[2] The couple had one daughter : Through his mother, after the death in 1931 of his uncle Jaime, Duke of Madrid, Leopold was an heir to the Carlist claims to the throne of Spain, but having given up his aristocratic status upon his morganatic marriage in 1919, he renounced the claims in favour his youngest brother, Archduke Karl Pius of Austria (Vienna 4 December 1909 – Barcelona 24 December 1953), but took them up again after his brother's death.

In 1930 Archduke Leopold was approached by a pair calling themselves "Colonel Townsend" and "Princess Baronti", who asked him to vouch for their identities to Infanta Maria Theresa of Portugal, the sister-in-law of the Emperor Franz Joseph I of Austria.

The resulting legal action and public scandal saw Leopold indicted for aiding and abetting the fraud, and with theft of the proceeds of the sale.

He moved to Willimantic, Connecticut where he settled into a small house with his second wife and spent the rest of his life as a factory worker.