When estate planning, probate is a four-letter word. You want to avoid it, if at all possible. Why? Because it is essentially litigation, which, as we all know, is expensive. And, one such way to avoid Tampa, Florida, probate is through Lady Bird Deeds.
Lady Bird Deeds?
If the name sounds familiar, it should; it refers to former first lady, Claudia Alta “Lady Bird” Johnson, the wife of President Lyndon B. Johnson. Unfortunately, there is no consensus on why these deeds bear her name, but the point of Lady Bird Deeds is to protect your property and the property’s beneficiary from creditors after you pass.
These deeds are also known as Enhanced Life Estate Deeds. If they are legally and appropriately created, at your death, your Florida property automatically transfers to your designated beneficiary (or beneficiaries). However, while you are alive, you maintain the use, control and ownership of the property, and the passing to your beneficiary occurs outside of probate as it is an automatic transfer.
Used for the family home
Chances are, your largest asset is the Tampa, Florida, family home, which is why much of your estate plan is to protect that asset. This is where Lady Bird Deeds become so valuable. Without them or some other creative estate planning tool, your family home could be held up for months or years in probate after you pass.
Safe haven from Medicaid and creditors
If you plan on utilizing Medicaid in retirement, they often seek reimbursement from your estate. Lady Bird Deeds can protect the home from Medicaid reimbursement because it will not be part of your estate. This also applies to any other creditor.
Once you create a Lady Bird Deed on your home, though, you cannot sell it anymore without the consent of the beneficiary. Why? Because the beneficiary is now the co-owner, and if they do not want to sell the property, you, as the current owner, cannot force the issue. You cannot change your mind once the deed is created.
Luckily, your Tampa, Florida, attorney can create Lady Bird Deeds relatively easily and cheaply. As such, it has become more and more a popular option to protect the family home.