Benefits of a Florida Lady Bird Deed
A Florida Lady Bird Deed, also known as an enhanced life estate deed, is a powerful tool for property owners who want to retain control of their property during their lifetime while avoiding probate and ensuring a seamless transfer to their beneficiaries after death. Unlike traditional deeds, the Lady Bird Deed offers unique flexibility and benefits, making it a popular choice in Florida estate planning. Here, we break down what a Florida Lady Bird Deed is, how it works, and why it might be the perfect fit for your estate planning needs.
What Is a Florida Lady Bird Deed?
At its core, a Lady Bird Deed is a legal instrument that allows property owners to:
- Maintain complete control of their property during their lifetime.
- Name specific beneficiaries (remaindermen) to inherit the property after their passing.
- Avoid probate, ensuring that the property transfers smoothly and cost-effectively.
What sets the Lady Bird Deed apart is the owner’s ability to sell, refinance, or modify the property’s ownership without needing consent from the named beneficiaries. This flexibility ensures that the property owner’s rights are fully protected throughout their life.
Additionally, a Florida Lady Bird Deed is specifically tailored to meet the unique needs of Florida residents. It aligns with the state’s homestead exemption laws, ensuring homeowners can retain critical benefits while planning for their estate’s future. This combination of control, efficiency, and legal alignment makes the Lady Bird Deed an excellent choice for estate planning.
Key Advantages of a Florida Lady Bird Deed
- Avoids Probate: Probate can be a lengthy, expensive, and emotionally taxing process for families. A Lady Bird Deed bypasses this entirely, allowing the property to pass directly to the named beneficiaries. This eliminates the need for court involvement, saving both time and money while providing peace of mind for all parties involved.
- Flexibility: One of the standout features of a Lady Bird Deed is its flexibility. Unlike other property transfer methods, it allows the owner to make changes to the deed or revoke it altogether without requiring approval from the beneficiaries. This ensures that the property owner retains full control over their asset during their lifetime.
- Tax Benefits: Beneficiaries of a Lady Bird Deed enjoy a “stepped-up basis” in the property’s value. This means that when the property is sold after the original owner’s death, capital gains taxes are minimized or even eliminated. This tax advantage can lead to significant savings for the beneficiaries. Further, creating a Lady Bird Deed does not trigger any gift tax.
- Preserves Homestead Rights: Florida’s homestead exemption laws provide important tax and creditor protections for homeowners. A Lady Bird Deed allows property owners to maintain these benefits while setting up a seamless property transfer.
- Cost-Effective Alternative to a Trust: Setting up a Lady Bird Deed is more affordable than creating a living trust. For homeowners whose primary goal is to transfer a single property without probate, this deed offers a practical and cost-efficient solution.
- Protects Medicaid Eligibility: For individuals concerned about long-term care planning, a Lady Bird Deed can help protect Medicaid eligibility. The transfer of property under a Lady Bird Deed is not considered a completed gift, meaning it does not trigger penalties for Medicaid eligibility.
How to Set Up a Lady Bird Deed
Creating a Lady Bird Deed in Florida is a simple process, especially with the guidance of an experienced attorney. Here are the steps involved:
- Obtain the Property’s Legal Description: This information can be found on the current deed.
- Draft the Deed: Work with Hale Law and Title, P.A. to draft the Lady Bird Deed, ensuring it includes the necessary enhanced life estate language and clearly names the beneficiaries.
- Review for Accuracy: Before recording the deed, double-check all details to ensure accuracy and alignment with your estate planning goals.
- Record the Deed: Return the signed Lady Bird Deed to Hale Law and Title, P.A. so we can submit the deed to the county recorder’s office to make it part of the official property records.
- Communicate with Beneficiaries: While not legally required, it’s a good idea to inform your beneficiaries about the deed to ensure everyone is on the same page.
- Lady Bird Deeds can be Changed: Unlike other property transfer methods, the Lady Bird Deed allows the owner to make changes to the deed or revoke it altogether without requiring approval from the beneficiaries.
Why Work with Hale Law and Title, P.A.?
Navigating estate planning can feel overwhelming, but you don’t have to do it alone. At Hale Law and Title, P.A., we specialize in Florida Lady Bird Deeds and other estate planning solutions. Our experienced attorneys will:
- Provide personalized guidance tailored to your unique needs.
- Ensure your Lady Bird Deed complies with Florida law.
- Help you understand how the deed fits into your broader estate planning strategy.
Contact Hale Law and Title, P.A. Today
Planning for the future doesn’t have to be complicated. With a Florida Lady Bird Deed, you can protect your assets, avoid probate, and secure your family’s financial future. Contact Hale Law and Title, P.A. today to schedule a consultation. Let us help you take the first step toward peace of mind and a well-planned estate.
Lady Bird Deeds: Avoid Probate!
Claudia Alta Taylor “Lady Bird” Johnson served as First Lady of the United States from 1963 to 1969 as the wife of President Lyndon B. Johnson. Her biggest impact as first lady was to spearhead the effort to clean up and beautify our nation’s roads and highways. Interestingly, her name is also connected to a very powerful probate avoidance tool, the “Lady Bird Deed.” The ironic thing is that Lady Bird Johnson herself had nothing to do with their creation. Rather, a Florida attorney who has been called “the father of the Lady Bird Deed”, Jerome Solkoff, used her name as a fictional persona in his educational materials which explained the benefits of these deeds. Lady Bird Johnson died in 2007, but the deeds that she unwittingly (and probably unknowingly) helped to name continue to live on.
A Lady Bird Deed is an effective and inexpensive way to avoid probate for a real estate asset while maintaining nearly all of the benefits of standard “fee simple” ownership. It is sometimes called a “transfer on death deed” or an “enhanced life estate deed.”
Frequently a decedent’s main asset of any real value is his or her home. But unfortunately, usually that asset must go through lengthy and expensive probate proceedings. That is because by the time a decedent dies, it is too late for him or her to “plan” his or her estate. The heirs are left to do the work and pay the attorneys and accountants to probate and account for the estate.
Fortunately, the living can still plan their estate. For people whose main asset is their home, or for those who have already arranged for the transfer of their other assets (i.e., via joint ownership or transfer on death designations), a Lady Bird Deed may be in order.
What is it? It is a simple warranty deed recorded in the public records whereby the owner states on the face of the deed that he or she is the owner of, and shall maintain full control of, the property for the span of his or her life. He or she can sell the property (at fair market value) or mortgage the property and keep all of the proceeds generated thereby. It also states that he or she can improve the property or even let it fall into disrepair. He or she can do all of this without needing anyone else’s signature. And if the property is homesteaded, there is no effect on the homestead tax exemption or Florida constitutional homestead protection from creditors. And only nominal documentary stamps (all of seventy cents) are due when he or she signs the enhanced life estate deed, since there is no change in the beneficial ownership of the property.
The deed goes on to state that upon the owner’s death, the property automatically goes to whomever is named in the deed. Those named parties are called “remaindermen.” (The remainermen are usually the decedent’s children). If the owner wishes to disinherit one or more of the remaindermen during his or her life, he or she can do so simply by recording a new Lady Bird Deed. After the owner dies, the remaindermen just record the decedant’s death certificate in the public records. Then the property automatically belongs to the remaindermen. They can then keep the property or sell it. That’s it. No expensive and lengthy probate. No other documents to keep track of. No trust hassles or costs. And their resulting ownership is fully insurable by a title company.
