Lady bird deeds, also known as enhanced life estate deeds, are a unique estate planning tool available in Florida. They provide a flexible way to transfer real estate upon death without going through probate. Understanding the nuances of lady bird deeds can help you make informed decisions about your estate planning.
How lady bird deeds work
A lady bird deed allows you to retain control over your property during your lifetime while designating a beneficiary who will receive the property upon your death.
Unlike regular life estate deeds, you maintain the right to sell, mortgage, or otherwise manage the property without the beneficiary’s consent. This flexibility makes lady bird deeds an attractive option for many Floridians.
Benefits of using lady bird deeds
One of the primary benefits of a lady bird deed is avoiding probate. When the property owner dies, the property automatically transfers to the named beneficiary without the need for probate court involvement. This can save time, reduce legal fees, and simplify the transfer process.
Another advantage is that lady bird deeds can protect the property from Medicaid estate recovery. If you require long-term care and Medicaid assistance, the state cannot place a lien on the property to recover costs after your death, as the property passes directly to the beneficiary.
Potential drawbacks to consider
While lady bird deeds offer several benefits, they may not be suitable for everyone. For example, if you have multiple beneficiaries or a complex estate, other estate planning tools may be more appropriate.
Additionally, tax implications should be carefully considered. Consulting with an estate planning professional can help determine if a lady bird deed aligns with your overall estate plan.
Steps to create a lady bird deed
Creating a lady bird deed involves drafting a deed that includes specific language to retain a life estate and grant a remainder interest to the beneficiary.
You must sign, witness, and notarize this document according to Florida law. Then, record it with the county recorder’s office where the property is located.
Make informed decisions about lady bird deeds
Lady bird deeds provide a flexible and efficient way to manage the transfer of real estate upon death in Florida. By understanding how they work and their potential benefits and drawbacks, you can make informed decisions about your estate planning needs.