What is a Lady Bird Deed?
A Lady Bird Deed is also known as an Enhanced Life Estate Deed.
A Lady Bird Deed is a tool used to avoid probate on real estate including your home, rental property, investment property, commercial property and vacation home. It can be used even if you have a mortgage on the property.
Having a Last Will and Testament does not avoid probate. If you pass away owning your home or other real estate in your name only, it must go through probate upon your death to get the property out of your name and into the names of your children.
An Lady Bird Deed states that, as long as you are alive, you have the sole and exclusive use and benefit of the property and, upon your death, it will automatically pass to your children, family or favorite charity that you have named in the Lady Bird Deed.
BENEFITS OF A LADY BIRD DEED
You have the sole and exclusive use and benefit of your home during your lifetime.
You keep your homestead real estate tax exemption which saves you about $750 per year in real estate taxes.
The Lady Bird Deed does not cause an increase in your real property tax bill.
You can change your mind at any time. Even after you do the Lady Bird Deed, you may sell, refinance, or change who gets your home upon your death without your children’s knowledge, signature or consent.
Your children have no rights to your home during your lifetime and, therefore, their creditors will not be able to place a lien against your home. If, instead, you add your children’s names to your deed (which we advise you not to do), their creditors may have a right to place a lien against your home.
A Lady Bird Deed Avoids Probate – Your home or other real estate will automatically pass to your spouse, children, family, friends or charity (whomever you choose) at your death, without the time and expense of probate. All your children need to do is simply record your death certificate in the public records of the county where the property is located.
An Lady Bird Deed gives your beneficiaries a stepped-up basis in your home upon your death for capital gains tax purposes, potentially saving them capital gains taxes when they sell it.
BLENDED FAMILIES: PRO TIP: If you and your spouse have children from previous marriages, a Lady Bird Deed can ensure that someday your home will go to all your children.
FREQUENTLY ASKED QUESTIONS:
WHAT IS AN ‘ORDINARY’ LIFE ESTATE DEED? An ordinary life estate deed states that you have the sole use and benefit of the property during your lifetime and, upon your death, it will go to the persons stated in the deed (the “remaindermen”) without the need for probate. An ordinary life estate deed does avoid probate, but it cannot be changed by you later without the written joinder and consent of all of the remaindermen.
WHAT IS AN ‘ENHANCED’ LIFE ESTATE DEED? An enhanced life estate deed is also known as a Lady Bird Deed. It also states that you have the sole use and benefit of the property during your lifetime and, upon your death, it will go to the persons stated in the deed (the “remaindermen”) without the need for probate. However, a Lady Bird Deed can be changed later without the signature, knowledge or consent of the remaindermen. This means that you are free to sell or mortgage your property, or change who the remaindermen are without the knowledge, signature or consent of the remaindermen.
ARE LADY BIRD DEEDS USED IN EVERY STATE? The answer is “No”, but Florida is one of several states that do recognize the validity and use of a Lady Bird Deed.
CAN I PREPARE MY OWN LADY BIRD DEED? There is no law that states that an attorney must prepare this or any other deed for you. However, we do recommend that an attorney prepare all deeds, including your Lady Bird Deed.
WHAT SHOULD I DO NOW? Olsen Law Group offers a free initial consultation regarding the preparation of your Lady Bird Deed and other estate planning documents. We can do that initial consultation by phone, zoom or in person (your choice.) We also offer Saturday appointments. Call the Olsen Law Group at (407) 423-5561 to schedule your free estate planning consultation.