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What Is a "Lady Bird" Deed?

Even if you’re an estate-planning beginner, you’ve likely heard a tale or two about probate. Probate court is a legal process that may be necessary after someone’s death. One of the ways in which you can help your family avoid probate is to plan ahead for the transfer of your property in Florida with an enhanced life estate deed; also called a “Lady Bird” deed. Get the facts on this deed from our experienced lawyers.

Enhanced Deed vs. “Regular” Life Estate Deed

In a non-enhanced life estate deed, the real estate owner gives future ownership and control of his or her property to beneficiaries while the owner is still living. A regular life estate deed vests these rights in the beneficiaries immediately upon execution, which results in the owner’s rights over the property being restricted during his/her lifetime. Until the owner’s date of death, he or she will have to ask the beneficiaries’ permission before mortgaging or selling the property. The owner might also be liable to the beneficiaries if he or she damages or decreases the value of the property.

An enhanced life estate deed, on the other hand, does not strip the owner of his/her rights to the property. With a Lady Bird deed, the asset owner (the “life tenant”) keeps total control over the property during his or her lifetime. The life tenant retains the ability to use and profit from the property, sell the property, and mortgage the property at any time without permission from the beneficiaries. Moreover, the individual executing such deed retains the right during his/her lifetime to revoke or change the individual he/she has named to receive the property upon his/her death should circumstances change in the future. The enhanced deed still allows the property owner to avoid probate and reap the other benefits of having a life estate deed, such as avoiding a federal gift tax.

Lady Bird deeds are only available in three states: Florida, Michigan, and Texas. They can be of great value to property owners who want to retain control over their properties until death, escape probate, and not affect their Medicaid benefits eligibility. Enhanced life estate deeds transfer real estate ownership and control to beneficiaries upon the owner’s death in a way that’s simple for everyone. After the property owner passes away, his or her estate automatically transfers to the new owner(s) without the need for probate.

Create a Lady Bird Deed Today

These deeds have unique language and requirements that classify them as Lady Bird deeds. If the enhanced life estate deed sounds like something you want to take advantage of as a Florida property owner, make sure you do so through a licensed real estate or estate planning attorney.