Florida Probate Litigation Lawyer Blog
When Florida homeowners think about keeping their house out of probate upon their death, they often assume the only options are titling their home to a revocable living trust or simply adding another person to the deed as a co-owner during their lifetime. While these options may be effective estate planning tools, depending on one’s individual circumstances, they may not be right for everyone. A trust can be costly to prepare, and adding a co-owner gives that person an immediate interest in the property, may expose the home to that person’s creditors, may implicate gift tax considerations, etc. Florida recognizes a third option that avoids many of these problems: the Lady Bird deed.
A Lady Bird deed, also known as an “enhanced life estate deed,” allows a property owner to transfer real estate to designated persons upon their death while keeping complete control of the property during life. The owner, called the grantor, retains the right to live in, sell, mortgage, and even give away the property during their lifetime without anyone else’s permission. The designated person(s) receiving the property upon the death of the grantor, called remaindermen, hold only a future interest that does not vest until the grantor dies. When the grantor dies, title to the property passes to the remaindermen automatically. No probate petition, court order, or new deed is required.
Take a simple example. Suppose Robert, a widower in Miami, owns his home outright and wants his daughter to inherit it, and otherwise does not have other substantial assets. Robert does not want to incur the expense of creating a trust, and he does not want to add his daughter as a co-owner on the deed now, because that would potentially expose the home to her creditors and limit his ability to sell it later without her permission. Robert instead executes a Lady Bird deed, titling the property to himself as the life tenant and naming his daughter as the remainderman. During his lifetime, Robert can do whatever he likes with the home, including selling it or naming a different beneficiary, all without his daughter’s involvement or permission. If Robert still owns the home when he dies, and otherwise has not taken any other action to affect its title, his daughter takes title to the property immediately upon his death without having to go through probate.
This is the key difference between a Lady Bird deed (an enhanced life estate deed) and a traditional life estate deed. In a traditional life estate deed, the remaindermen hold a vested interest the moment the deed is recorded, so the grantor cannot sell or otherwise alienate the property without their permission. The enhanced powers reserved in a Lady Bird deed eliminate that problem, leaving the grantor in absolute control while preserving Florida homestead protections during life.
A Lady Bird deed is not right for every situation, and its benefits depend entirely on careful drafting. The specific reserved-powers language matters a great deal, because without it the document is simply an ordinary life estate deed. A Lady Bird deed also transfers only the property described in it, so it is not a substitute for a comprehensive estate plan, and it can become complicated where there are minor children, multiple beneficiaries, or blended-family dynamics. Knowing the rules ahead of time, and putting the right document in place, is well worth the effort.
The Miami estate planning and probate attorneys at Chepenik Trushin LLP are ready, willing, and able to assist with any estate planning, probate administration, or deed preparation needs. Please give us a call today at 305-981-8889.
