Do You Need a Lady Bird Deed?
When a family creates an estate plan, their primary goals are often to make sure their assets are received by their loved ones and that a probate administration is not needed. Most individuals also want to retain full control of their assets during their lifetime.
An enhanced life estate deed is a useful and rather simple estate planning tool. An enhanced life estate deed is commonly referred to as a “Lady Bird deed,” and it is believed that the Lady Bird deed received this nickname because former President Lyndon Johnson used this type of deed to transfer property to his wife, Lady Bird Johnson.
This type of deed allows the owner of real property in Florida to retain complete control of the property during his or her lifetime and transfer the property at death without the need for probate.
Standard Life Estate Deed
With a standard life estate deed, the owner conveys the property to a beneficiary but retains the lifetime use of the property. The owner’s right to the ownership is known as a life estate in the property. Under this type of life estate deed, the life estate holder typically cannot sell, mortgage, gift, or otherwise convey the property. Further, a standard life estate deed is irrevocable. While this type of deed does avoid probate, it is inflexible and is not an ideal option for many.
Enhanced Life Estate Deed
An enhanced life estate deed, however, offers many benefits that the standard life estate deed does not. An enhanced life estate deed is essentially a beneficiary designation for your real property. The deed transfers your interest in real property to a person or multiple persons, who are the remainder beneficiaries of your real property interest, at your death. During your lifetime, you can sell, mortgage, or gift the property. The consent of the remainder beneficiaries of the enhanced life estate deed is not required. Another benefit of the enhanced life estate deed is that it is not irrevocable. The owner of the property is free to revoke the remainder interest or record a new deed naming a new remainder beneficiary.
Property titled in your individual name must go through probate for the property to pass to your intended beneficiary. Probate is a court-supervised process that is expensive and time-consuming. An enhanced life estate deed will pass your real property interest to your remainder beneficiary without the need for a probate administration.
If the property is your primary residence, an enhanced life estate deed will not affect your homestead tax exemption or Save Our Homes cap. If your home qualifies for homestead protection under Florida law, then it will continue to be protected after recording the enhanced life estate deed.
Is It Right for You?
Whether the property is your homestead property or a vacation property, an enhanced life estate deed is an easy and effective tool to transfer your real property to your loved ones after you pass away.
Please contact one of our estate planning attorneys for a free consultation to determine whether an enhanced life estate deed is the right fit for you.